When a Firm Creates Negative Externalities by Polluting, in Order

question 87

Multiple Choice

When a firm creates negative externalities by polluting, in order to achieve the socially efficient outcome:

• A)​the firm's production should be prohibited.
• B)​the firm's production should be increased and the price of its output should be decreased.
• C)​the firm's production should be increased and the price of its output should be increased.
• D)​the firm's production should be reduced and the price of its output should be increased.

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