The marginal external cost associated with air pollution increases with the annual output of a polluting industry. At the current competitive equilibrium level of output per year, the marginal external cost is $10 per unit of output. To achieve efficiency, a. a corrective tax of $10 per unit of output is required.
b. a corrective tax of more than $10 per unit of output is required.
c. a corrective tax of less than $10 per unit of output is required.
d. a corrective subsidy of $10 per unit of output is required.
e. a corrective subsidy of less than $10 per unit of output is required .