To Internalize a Positive Externality

question 105

Multiple Choice

To internalize a positive externality:

• A)​the consumers of a good could receive a subsidy equal to the external benefit resulting from the production or consumption of the good.
• B)​a producer's costs could be increased by an amount equal to the external benefit resulting from the production of the good.
• C)​consumers of the good could pay a tax equal to the external benefit resulting from the production or consumption of the good.
• D)​None of the above are correct.

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