Governments can deal with externalities through the use of

Question

Quizplus · Accepted Answer

Governments can use a combination of subsidies, taxes, and price controls to deal with externalities. Subsidies can be used to incentivize positive externalities, such as providing subsidies for the use of solar energy or public transportation. Taxes can be used to discourage negative externalities, such as a carbon tax to reduce pollution. Price controls can be used to ensure that the cost of a good or service takes into account its externalities, such as setting a minimum price for milk to account for the positive externalities of dairy farming. Therefore, all of the options are correct and can be used in varying degrees to deal with externalities.

Governments Can Deal with Externalities Through the Use of