When a Tax Is Imposed on a Market with a Negative

Multiple Choice

When a tax is imposed on a market with a negative externality, the market is:

A) inefficient, because the net benefit of buying another unit is zero for all market participants.
B) efficient, because the net benefit of buying another unit is zero for all market participants.
C) efficient, because the government mandates the efficient quantity without regard for net benefits.
D) inefficient, because the government mandates the tax without regard for net benefits.