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

Question

Quizplus · Accepted Answer

A tax on producers would internalize the marginal cost of the negative externality, leading to a decrease in output and a more efficient allocation of resources. Subsidies would only exacerbate the problem by increasing output, and quantity standards may not be feasible or effective in all cases. A tax on consumers would not incentivize producers to change their behavior and internalize the cost.

Which of the Following Will Eliminate the Inefficiency Problems Associated