If a pigovian tax is not large enough, the resulting:_____.
a. outcome will not maximize surplus.
b. quantity will be too high.
c. outcome will be inefficient.
d. all of these statements are true.

A Pigouvian tax has the following effects on a market: outcome won't optimize surplus; result will be inefficient; quantity will be too large. If the Pigouvian tax is too small, private costs will be lower than societal costs. Pigouvian taxes can also increase an economy's efficiency, particularly if they pay for the external damage. The actual cost of creating the good or service is created. The marginal social cost of pollution at the socially ideal level of pollution is equal to the ideal Pigouvian tax.

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If a pigovian tax is not large enough, the resulting:_____. a. outcome will not maximize surplus. b. quantity will be too high. c. outcome will be inefficient. d. all of these statements are true.

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If a pigovian tax is not large enough, the resulting:_____.
a. outcome will not maximize surplus.
b. quantity will be too high.
c. outcome will be inefficient.
d. all of these statements are true.