Government Regulators Know That Pollution Is a Problem in Cleveland

Government regulators know that pollution is a problem in Cleveland.However,information on the social cost of this externality is difficult to come by.Which of the following statements best describes how this information problem might manifest itself?

A) Well-intentioned regulators monitor a handful of polluting factors and are unable to determine how much they contribute to the problem.
B) Well-intentioned regulators decide to shut down the plants and start government production in state-of-the-art factories.
C) Well-intentioned regulators impose a collective tax that ends up reducing output beyond the optimal level of output.
D) Well-intentioned regulators fail to do anything because they are afraid of doing the wrong thing.