Carlton and Loury present four fundamental contentions in their article. To begin with, Pigovian charges work temporarily, in light of the fact that the quantity of firms can't differ. Second, Pigovian charges don't work in the long haul on the grounds that the quantity of firms can shift. Third, an industry with a particular number of firms and scale can accomplish the long-run social ideal (LRSO). The most ideal choice is to add a section charge for possible firms and an endowment for current firms to confine a development in the quantity of firms. Fourth, it is feasible for a duty strategy to make a LRSO