a private good when there is a positive external cost created as a by-product of its production
a common property resource when there is a negative external cost created as a by-product of its production
a public good when there is a negative external cost created as a by-product of its production
a private good when there is a negative external cost created as a by-product of its production
1 answer
The purpose of a Pigovian tax is to create the efficient level of production and consumption of a private good when there is a negative external cost created as a by-product of its production.
So the correct option is: a private good when there is a negative external cost created as a by-product of its production.
