In order for a Pigovian tax to be efficient, it often requires detailed information about:
A)the social and private costs of the good
B)command and control
C)governments and individuals
D)production and technology

Question

Quizplus · Accepted Answer

A Pigovian tax aims to internalize external costs, or the costs of production that are not paid by the producer but instead by society. In order for the tax to be efficient, there must be a clear understanding of both the social and private costs of the good. This information is necessary to determine the appropriate tax rate in order to fully cover the external costs and encourage producers to find more efficient, lower-cost methods of production.

In Order for a Pigovian Tax to Be Efficient, It