To Internalize a Negative Externality

question 82

Multiple Choice

To internalize a negative externality:

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

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