A Pigouvian Tax Is a Tax Designed to ________

question 204

Multiple Choice

A Pigouvian tax is a tax designed to ________.

• A) induce the consumers of a good to reduce their consumption of the good
• B) induce the producers generating negative externalities to reduce production
• C) induce the producers generating positive externalities to reduce production
• D) force the producers to stop the production of a good in the short run