Case: To encourage any industry to produce at the socially optimal level, the government should impose a unit tax on output equal to the marginal cost of production. Questions: (a) True or false? (b) Why?

Case: To encourage any industry to produce at the socially optimal level, the government should impose a unit tax on output equal to the marginal cost of production. Questions: (a) True or false? (b) Why?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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BN11.3 (a) (b)
Case:
To encourage any industry to produce at the socially optimal level, the government
should impose a unit tax on output equal to the marginal cost of production.
Questions:
(a) True or false?
(b) Why?

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