When an Industry Is Characterized by Technology Spillover, What Should

question 385

Multiple Choice

When an industry is characterized by technology spillover, what should the government do to ensure that the market equilibrium equals the socially optimal equilibrium?

• A)Impose a tax greater than the value of the technology spillover.
• B)Not allow production of any product that causes a technology spillover.
• C)Provide a subsidy equal to the value of the technology spillover.
• D)Require producers to "clean up" any spillover that results from their production process.

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