If a Good Incurs a Negative Externality, Then the Socially

question 56

Multiple Choice

If a good incurs a negative externality, then the socially desirable output level can be reached by

• A)increasing the supply of the good.
• B)decreasing the supply of the good.
• C)increasing the demand for the good.
• D)subsidizing the consumption of the good.
• E)allowing the government to produce the good.