To Move Closer to the Social Optimum When a Negative

Multiple Choice

To move closer to the social optimum when a negative externality exists, the cost to society of the externality should be:

A) incorporated/added on to the price so that demand reflects the true social costs.
B) calculated per unit and producers taxed accordingly with a goal of making the supply curve reflective of the marginal social cost of the externality.
C) minimized by forcing producers of the externality to shut down when they produce a negative externality.
D) minimized by subsidizing the producers of the externality.