Charging rents can lessen inefficient "externalities."

Question

Quizplus · Accepted Answer

Charging rents to individuals or businesses can create incentives to use resources more efficiently and reduce the negative impacts of externalities, such as pollution or congestion. By internalizing costs through charging rents, individuals and businesses will be encouraged to reduce their consumption or emissions in order to minimize their costs. This can result in a reduction of overall externalities and a more efficient use of resources.

Charging Rents Can Lessen Inefficient "Externalities