When external costs are present and government imposes a tax equal to the external marginal cost, then efficiency can be achieved.

Name: When external costs are present and government imposes a tax equal to the external marginal cost, then efficiency can be achieved.
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Quizplus · Accepted Answer

When a tax equal to the external marginal cost is imposed, it internalizes the externality, aligning private costs with social costs and leading to an efficient market outcome.

When External Costs Are Present and Government Imposes a Tax