Economists prefer greater effort made to force internalization of externalities through taxes rather than using alternative approaches.

Question

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Economists generally prefer using taxes to internalize externalities, as it is a more efficient and market-based approach that encourages producers and consumers to find the most cost-effective ways of reducing the negative external effects of their actions. Other alternatives, such as subsidies, regulations, or public provision of goods and services, can be less effective or more costly in achieving the same goal.

Economists Prefer Greater Effort Made to Force Internalization of Externalities