An Emissions Tax (Imposed on Each Unit of Pollution Produced)that

Multiple Choice

An emissions tax (imposed on each unit of pollution produced) that is set too high to achieve allocative efficiency will cause

A) too few resources to be devoted to pollution abatement and too little of the product to be produced.
B) too few resources to be devoted to pollution abatement and too much of the product to be produced.
C) no change in the polluting firm's behaviour.
D) too many resources to be devoted to pollution abatement and too little of the product to be produced.
E) new firms to enter the industry.