If a Pigouvian tax or subsidy were used to correct this externality, what would be chosen? a. subsidy = $0.20 %3D b.tax = $0.20 O C. subsidy = $0.15 d. tax = $0.15

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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QUESTION 18
0.90
0.85
0.80
Supply
0.75
0.70
0.65
MSB
0.60
0.55
0.50
Demand
0.45
0.40
300
350
400
50
100
150
200
250
If a Pigouvian tax or subsidy were used to correct this externality, what would be chosen?
a. subsidy = $0.20
b. tax =
C. subsidy = $0.15
d. tax = $0.15
Transcribed Image Text:QUESTION 18 0.90 0.85 0.80 Supply 0.75 0.70 0.65 MSB 0.60 0.55 0.50 Demand 0.45 0.40 300 350 400 50 100 150 200 250 If a Pigouvian tax or subsidy were used to correct this externality, what would be chosen? a. subsidy = $0.20 b. tax = C. subsidy = $0.15 d. tax = $0.15
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