Assuming negative externalities in production,the type of government action that could bring about an efficient level of production would be

Question

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By levying a tax equal to the marginal external costs, the cost of production for the firm will increase, incentivizing the firm to produce less and thereby reducing the negative externalities. This will lead to an efficient level of production where social marginal cost equals social marginal benefit. The other options either do not address the negative externalities or involve providing subsidies which can lead to overproduction and further negative externalities.

Assuming Negative Externalities in Production,the Type of Government Action That