Which of the following will eliminate the inefficiency problems associated with negative externalities?

 a) A subsidy to consumers in order to decrease the effective price and increase output. 

b) A tax levied on consumers so as to increase the effective price 

c) A tax levied on producers so as to internalize the marginal cost of the externality

 d) A subsidy to producers in order to reduce their cost of production 

e) A government mandate using quantity standards to reduce the externality 

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ANSWER a A subsidy to consumers in order to decrease the effective price and increase output To incr... View the full answer