Multiple Choice
Suppose a particular production process results in a large amount of pollution and the government decides to impose a tax to correct for this externality, such that the socially optimal output will be produced. The tax will have the effect of shifting the
A) marginal private benefit curve to the right.
B) marginal social benefit curve to the right.
C) marginal private cost curve to the left.
D) marginal social cost curve to the left.
E) marginal private cost curve to the right.
Correct Answer:

Verified
Correct Answer:
Verified
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