Which of the following will eliminate the inefficiency problems associated with negative externalities? a) A subsidy to
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Question:
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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