The Imposition of a Per-Unit Tax on Polluting Firms Will

Multiple Choice

The imposition of a per-unit tax on polluting firms will result in the socially efficient level of production only if the tax equals:

A) ​the marginal social cost plus the marginal private cost.
B) ​the marginal social cost plus the marginal external cost.
C) ​the marginal social cost minus the marginal private cost.
D) ​the average total cost minus the average variable cost.