Pigouvian taxes, price responsiveness, and deadweight loss. We noted that the Pigouvian prescription does not tell us to set the tax rate as a function of how much the market will respond. This can be:

What does the Pigouvian prescription not tell us about setting the tax rate?
A) How much the market will respond
B) How to calculate deadweight loss
C) The importance of price responsiveness
D) The impact of Pigouvian taxes on the market