When a negative externality is present in a market,the government

Question

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The government should regulate a negative externality only if the benefits of regulation exceed the costs. This is because regulation can come with its own costs, such as increased administrative expenses and potential unintended consequences. Therefore, the government must weigh the costs and benefits of regulation before making a decision. Additionally, if the public supports regulation, it can help justify the regulatory action.

When a Negative Externality Is Present in a Market,the Government