Which of the Following Statements Describes the Best Way to Internalize

question 136

Multiple Choice

Which of the following statements describes the best way to internalize a positive externality?

• A) A producer could move its operation to a less populated area.
• B) Consumers of the good could pay a tax equal to the external benefit resulting from the production or consumption of the good.
• C) The consumers of a good could receive a subsidy equal to the external benefit resulting from the production or consumption of the good.
• D) A producer's costs could be increased by an amount equal to the external benefit resulting from the production of the good.