Which of the following is a measure taken by the government to internalize the externalities?

Question

Quizplus · Accepted Answer

Cap and Trade is a government policy that aims to internalize externalities by setting a limit on the amount of pollution a company can emit. Companies are then issued permits that allow them to emit a certain amount of pollution. If a company emits less than its permit, it can sell the remaining permits to other companies that need them. This creates a market for pollution and incentivizes companies to reduce their emissions.

Which of the Following Is a Measure Taken by the Government