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Suppose an electric power plant produces sulfur dioxide when it burns coal to generate electricity and does not attempt to reduce the sulfur dioxide emissions.
Suppose an electric power plant produces sulfur dioxide when it burns coal to generate electricity and does not attempt to reduce the sulfur dioxide emissions. Give an example of how a government policy might fail in correcting the market failure. (Check all that apply.) A. The government could directly mandate that firms reduce the pollution they emit to below the efficient level. B. It could impose a tax equal to the external cost of the emissions, causing the power plant to internalize the externality. C. The government could impose too large a tax that would reduce pollution below the efficient level. D. Only A and C are correct. E. All of the above are correct
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