Which of the following statements is TRUE?I. A Pigouvian subsidy reduces the market price to encourage consumption and correct for the underproduction of a good.II. A Pigouvian tax increases the market price to discourage consumption and correct for the overproduction of a good.III. Negative externalities create deadweight losses, but positive externalities do not. I, II, and III I only III only I and II only

Which of the following statements is TRUE?I. A Pigouvian subsidy reduces the market price to encourage consumption and correct for the underproduction of a good.II. A Pigouvian tax increases the market price to discourage consumption and correct for the overproduction of a good.III. Negative externalities create deadweight losses, but positive externalities do not. I, II, and III I only III only I and II only

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter17: Externalities And The Environment

Section: Chapter Questions

Problem 6QFR

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