Question

Correcting a market with an externality through taxation is _________ correcting it through a set output target from command and control. Group of answer choices less efficient than as efficient as either more or less depending on the elasticity of demand more efficient than

Answer 1

Correct question:

Correcting a market with an externality through taxation is _________ correcting it through a set output target from command and control.

Group of answer choices

A. less efficient than

B. as efficient as

C. either more or less depending on the elasticity of demand

D. more efficient than

Answer:

Correcting a market with an externality through taxation is (A) less effective than correcting it through a set output target from command and control.

Correcting a market with taxation:

• The government can discourage the consumption of harmful products by raising taxes on them.
• Cigarette and alcohol taxes, for example, are raised on a regular basis to discourage their consumption and limit their adverse impacts on unconnected third parties.

Command and control strategies:

• Command and control is a sort of environmental regulation that allows policymakers to expressly regulate both the amount and the procedure by which a company should maintain environmental quality.
• Correcting marketing is more effective than correcting manufacturing through taxation.

Reason -

As it is stated above Correcting marketing is more effective than correcting manufacturing through taxation.

Therefore, Correcting a market with an externality through taxation is (A) less effective than correcting it through a set output target from command and control.

Know more about market correction here:

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