Multiple Choice
Suppose that alcohol consumption creates a negative externality. What can the government do to equate the equilibrium quantity of alcohol and the socially optimal quantity of alcohol?
A) impose a tax on alcohol that is equal to the per-unit externality
B) offer a subsidy on alcohol that is equal to the per-unit externality
C) impose a regulation limiting the amount of alcohol that each consumer can purchase
D) nothing
Correct Answer:
Verified
Correct Answer:
Verified
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