To encourage an industry to produce at the socially optimal level, the government should impose a unit

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To encourage an industry to produce at the socially optimal level, the government should impose a unit tax on output equal to the marginal cost of production. True or false? Explain.

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Microeconomics

ISBN: 978-0132857123

8th edition

Authors: Robert Pindyck, Daniel Rubinfeld

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Question Posted: Dec 22, 2015 02:38 AM

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To encourage an industry to produce at the socially optimal level, the government should impose a unit

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This statement is false While a tax can encourage firms to produce at ...View the full answer

Microeconomics

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