Question
Which of the following taxes is an example of Pigouvian tax?
Answer: Option C
:
C
Pigouvian taxes are used to decrease supply to socially optimal levels. In this case, decreasing the supply of cigarettes leads to a socially optimum outcome.
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:
C
Pigouvian taxes are used to decrease supply to socially optimal levels. In this case, decreasing the supply of cigarettes leads to a socially optimum outcome.
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