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1.2.9 Indirect taxes and subsidies

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Question 3

In 2025, an environmental advisory committee recommended the introduction of a 40% environmental levy on the sale of synthetic nitrogen-based fertilizers to combat river eutrophication and reduce agricultural greenhouse gas emissions.

Evaluate the likely microeconomic effects of such a tax.

Market equilibrium with negative externalities and indirect tax

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1.2.9 Indirect taxes and subsidies Questions

  1. A Level
  2. /Economics
  3. /1.2.9 Indirect taxes and subsidies