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What is a reason pollution tax results in a pollution level that is socially efficient? The pollution tax acts as a punishmen

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Emission of pollution is considered as negative externality, which causes harmful effects to the environment. The damage led by the pollution to the environment will thus be fulfilled by the pollution taxes imposed by the governments. Stricter pollution controls will lead to a fall in level of production by the polluter or producing firm and the quantity will become socially efficient because at this level Social Marginal Benefit will become equal to Social Marginal Cost.

Thus, by making the polluter accountable for the external costs of their actions results in a pollution level that is socially efficient.

So, the correct option will be ' the pollution tax makes the polluter account for the external costs of their actions'.

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