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BigFella9503 BigFella9503
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Suppose the government imposes an emissions tax of $t on each unit of pollution produced by a firm. Under which of the following circumstances would the tax rate be set too high to achieve allocative efficiency?

▸ The tax rate is greater than the marginal external cost of the pollution.

▸ The tax rate causes the firm's ATC curve to shift up.

▸ The firm could not afford to pay the tax.

▸ The tax rate is less than the marginal external cost of the pollution.

▸ The tax rate is greater than the firm's private marginal cost of production.
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Microeconomics

Microeconomics


Edition: 17th
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edatayedatay
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BigFella9503 Author
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A year ago
Just got PERFECT on my quiz
mkyoungs
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Smart ... Thanks!
deathDoUsPart
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2 hours ago
this is exactly what I needed
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