What Determines Whether a Corrective Tax or Quantity Regulation Is

Multiple Choice

What determines whether a corrective tax or quantity regulation is a better choice for controlling an externality?

A) It depends on whether the externality is positive or negative.
B) It depends on whether more is known about marginal external costs or about the socially optimal quantity.
C) It depends on how much damage is being done by the externality.
D) It depends on whether or not the rational rule can be applied.