Case: To encourage any industry to produce at the socially optimal level, the government should impose a unit tax on output equal to the marginal cost of production. Questions: (a) True or false? (b) Why?

Case: To encourage any industry to produce at the socially optimal level, the government should impose a unit tax on output equal to the marginal cost of production. Questions: (a) True or false? (b) Why?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter13: Positive Externalities And Public Goods

Section: Chapter Questions

Problem 6SCQ: Education provides both private benefits to those who receive it and broader social benefits for the...

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BN11.3 (a) (b)
Case:
To encourage any industry to produce at the socially optimal level, the government
should impose a unit tax on output equal to the marginal cost of production.
Questions:
(a) True or false?
(b) Why?

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