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How does a pollution tax work to reduce emissions? A. It increases producers' costs and decreases production, which decreases emissions. B. It eliminates external costs
How does a pollution tax work to reduce emissions? A. It increases producers' costs and decreases production, which decreases emissions. B. It eliminates external costs so that firms produce the efficient quantity and emit the efficient amount of pollution. C. A tax equal to marginal social cost minus marginal social benefit results in the efficient amount of pollution. D. It increases producers' costs so that they decrease the quantity produced to the point at which pollution is eliminated
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