When a negative externality is present in a market, when a tax is imposed, it is:
A. inefficient, because the net benefit of buying another unit is zero for all market participants.
B. efficient, because the government mandates the efficient quantity without regard for net benefits.
C. inefficient, because the government mandates the efficient quantity without regard for net benefits.
D. efficient, because the net benefit of buying another unit is zero for all market participants.
Answer: D
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