An Appropriate Way for Government to Intervene When External Diseconomies

Multiple Choice

An appropriate way for government to intervene when external diseconomies exist in an industry is to

A) shift the industry demand curve to the right by subsidizing consumers.
B) shift the industry supply curve to the left by taxing producers.
C) subsidize the industry to raise its profits.
D) encourage imports of the good to replace domestic production.
E) make the industry's supply curve more nearly reflect the supply curve of a competitive industry.