According to Pigovian Analysis,when Is a Tax Necessary to Improve

Multiple Choice

According to Pigovian analysis,when is a tax necessary to improve the market's economic efficiency?

A) When high transactions costs prevent private bargaining.
B) When the social marginal cost of production exceeds the private marginal cost.
C) When consumption of the good creates external benefits for others.
D) When at the competitive equilibrium,the social marginal benefit of the good equals its social marginal cost.