In order to achieve a socially optimal level of output,activities that generate negative externalities should be:
A)banned.
B)subsidized.
C)taxed.
D)bought out by the government.

Name: In order to achieve a socially optimal level of output,activities that generate negative externalities should be: A)banned. B)subsidized. C)taxed. D)bought out by the government.
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Question

Quizplus · Accepted Answer

Taxing activities that yield negative externalities forces the generator of the externality to bear the external cost.

In Order to Achieve a Socially Optimal Level of Output,activities