Taxation is basically very effective in reducing the consumption of pesticides because the demand for them often is highly elastic. Agriculture is a major source of pollution. From an environmental perspective, full economic costs are private costs plus social costs. Market failure resulting from externalities occurs when there are substantial differences between market values and social values. Explain in detail.

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Taxation is a powerful tool for reducing the consumption of pesticides because the demand for them is often highly elastic meaning that small changes in price can lead to significant changes in quanti... View the full answer