In the figure above,if a pollution tax is imposed that is equal to the marginal external cost of pollution,then at the equilibrium,marginal social cost would ________ marginal benefit,and the quantity of chemical produced would be ________.
A) exceed; above the efficient quantity
B) exceed; below the efficient quantity
C) be below; above the efficient quantity
D) be below; below the efficient quantity
E) equal; efficient

Question

Quizplus · Accepted Answer

Imposing a pollution tax equal to the marginal external cost aligns the marginal social cost with the marginal benefit, leading to the production of an efficient quantity of chemicals.

In the Figure Above,if a Pollution Tax Is Imposed That