Is this a Pigovian Tax?
If the govenment were to impose a fee of $10,000 for each unit of air pollution released by a steel mill, this policy would be considered:
A) A Subsidy
B) A Regulation
C) A Pigovian tax
D) A Command-and-Control Policy
A know it is not a subsidy or a regulation.
The way I underdstand a Command-and-Control Policy is an example of "you are forbidden to dump garbage in the reiver".
Then if would be a Pigovian tax correct?
http://www.investopedia.com/terms/p/pigoviantax.asp
Are you telling me it ia a Pigovian tax?
Yes.
Yes, based on your description, the policy of imposing a fee of $10,000 for each unit of air pollution released by a steel mill would be considered a Pigovian tax.
A Pigovian tax is a type of tax imposed on activities that generate negative externalities, such as pollution. The purpose of a Pigovian tax is to internalize the costs of these negative externalities by making the polluting activity more expensive, thereby encouraging firms to reduce their pollution levels. By charging a fee for each unit of air pollution released, the government is effectively placing a monetary penalty on the steel mill for polluting, thus creating an incentive for them to reduce their pollution levels.