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If a Pollution Tax in a Market with an External

Question 180

Multiple Choice

If a pollution tax in a market with an external cost changes the market so that it produces the efficient level of output,which of the following occurs?
i.The supply curve shifts leftward.
ii.The price increases.
iii.The quantity produced decreases.


A) i only
B) ii only
C) iii only
D) i and ii
E) i, ii, and iii

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