Refer to Table 10-1. How large would a corrective tax need to be to move this market from the equilibrium outcome to the socially optimal outcome?

A) $4
B) $5
C) $24
D) $20

Question

Refer to Table 10-1. How large would a corrective tax need to be to move this market from the equilibrium outcome to the socially optimal outcome?A) $4B) $5C) $24D) $20

rocheleah Kabalkin · Accepted Answer

Final Answer : A, Explanation :  The corrective tax needed to move the market to the socially optimal outcome is equal to the external cost, which is $4. This tax internalizes the external cost, aligning private costs with social costs.

Refer to Table 10-1. How large would a corrective tax need to be to move this market from the equilibrium outcome to the socially optimal outcome?

A) $4
B) $5
C) $24
D) $20

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