Multiple Choice
Suppose Johnson's Rubber Factory belches black smoke into the air over the city of Bellowsville. If the city of Bellowsville attempts to internalize the external costs associated with the production of rubber with a pollution tax, we can expect
A) the price of rubber not to change.
B) the price of rubber to increase.
C) the quantity of rubber demanded to increase.
D) no change in the quantity of rubber demanded.
Correct Answer:
Verified
Correct Answer:
Verified
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