Microeconomics: Principles, Applications, and Tools (8th Edition)

by O'Sullivan, Arthur; Sheffrin, Steven; Perez, Stephen

Published by Prentice Hall

ISBN 10: 0-13294-886-9

ISBN 13: 978-0-13294-886-9

Chapter 16 - External Costs and Environmental Policy - Exercises - 16.2 Taxing Pollution - Page 373: 2.4

Answer

Marginal Cost

Work Step by Step

Pollution taxes will decrease the amount of pollution generated IF the tax exceeds the marginal cost of the abatement.

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