Figure 10-18

question 84

Multiple Choice

Figure 10-18. The graph represents a corrective tax to reduce pollution. On the axes, Q denotes the quantity of pollution and P represents the price of pollution.
-Refer to Figure 10-18. The tax depicted on the graph

• A)gives polluting firms an incentive to develop cleaner technologies.
• B)is viewed by most economists as less effective than a command-and-control policy as a means of reducing pollution.
• C)has the effect of moving the allocation of resources further from the social optimum than it would be in the absence of the tax.
• D)All of the above are correct.

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