To increase society's total welfare (social efficiency), a production process that produces a negative externality should be:

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To increase society's total welfare, a production process that produces a negative externality should be taxed. This is because a negative externality imposes a cost on society that is not accounted for by the producer, and hence the market price of the produced good is lower than the social cost of production. By imposing a tax on the producer equal to the social cost of the externality, the market price of the good will increase to reflect its true cost, and the quantity produced will decrease to a socially optimal level. This will lead to an increase in total welfare by reducing the negative impact of the externality on society.

To Increase Society's Total Welfare (Social Efficiency), a Production Process