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Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

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BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

Suppose there is a negative externality. If a tax is used to correct for the negative externality, what condition must be satisfied? What must the tax equal?

To determine

Condition that must be satisfied to correct the negative externality using tax.

Explanation

When a cost is imposed on the third party who is not directly involved in an economic transaction. it is called negative externality...

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