Pigouvian taxes, price responsiveness, and deadweight loss.Wenoted that the Pigouvian prescription does not tell us to set the tax rateas a function of how much the market will respond. This can be counter-intuitive to some people, who reason that the size of the tax on pollution(for example) should depend on how much of a tax is needed to get peopleto stop polluting. Market logic, however, suggests simply that you want toprice the externality, irrespective of whether this produces a big or smal