Multiple Choice
When a quota is used to control an externality, the government must determine both _____ and _____.
A) the socially optimal quantity; how to distribute that quantity across suppliers
B) the socially optimal quantity; the socially optimal price
C) how large a tax to use; which external impact to address
D) how to bargain with companies; whether to use a subsidy
Correct Answer:
Verified
Correct Answer:
Verified
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