Governments Can Most Effectively Encourage a Firm to Produce the Efficient

question 206

Multiple Choice

Governments can most effectively encourage a firm to produce the efficient level of output of a good whose production causes a beneficial externality by

• A)increasing the demand at every price for the good.
• B)subsidizing the production of the good.
• C)taxing the production of the good.
• D)imposing a price ceiling on the good.

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