8. If utilities pollute the air too much in private equilibrium, corrective taxation of the utilities would: a. increase pollution and shift the private marginal cost curve downward. b. increase pollution and shift the private marginal cost curve upward. c. reduce pollution and shift the private marginal cost curve downward. d. reduce pollution and shift the private marginal cost curve upward.
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Step 1: In private equilibrium, utilities are polluting the air too much, meaning that the private marginal cost of production is lower than the social marginal cost of pollution. Show more…
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