To Encourage Consumption of a Good That Generates Positive Externalities

Multiple Choice

To encourage consumption of a good that generates positive externalities, the best option for policymakers would be to:

A) impose a tax on the amount consumed to achieve the socially optimal level.
B) mandate consumption of the good at the socially optimal level.
C) provide a subsidy per unit of the good consumed to achieve the socially optimal level.
D) do nothing, since the market will achieve the socially optimal level without government intervention.