A subsidy granted to a polluting firm would be one way of integrating external costs.

Question

Quizplus · Accepted Answer

A subsidy granted to a polluting firm would not integrate external costs; it would instead encourage and potentially increase pollution without accounting for the negative externalities imposed on society. To integrate external costs, a tax or regulation could be imposed on the firm to discourage pollution and account for the societal costs it imposes.

A Subsidy Granted to a Polluting Firm Would Be One