Question
The government introduces an emissions tax in order to achieve a specific emission target. Which statement(s) is (are) TRUE about an emissions tax when all
The government introduces an emissions tax in order to achieve a specific emission target. Which statement(s) is (are) TRUE about an emissions tax when all polluting firms face the same tax per unit of emissions? Mark all that applies.
Group of answer choices
When faced with the tax, the firms will reduce their emissions as long as the marginal abatement cost is lower than the tax.
Firms will not reduce enough emissions to achieve the emissions target.
The tax equates the marginal abatement costs across the polluting firms.
The firms with higher unregulated levels of emission will reduce more emissions than those with lower unregulated levels of emission.
The tax will lead to a cost-effective outcome.
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