Which of the Following Is Not an Advantage of Using

Multiple Choice

Which of the following is not an advantage of using taxes and subsidies to correct market imperfections?

A) Firms are encouraged to find ways of increasing external benefits.
B) Rates need to be frequently adjusted as external costs and benefits change.
C) Rates can be adjusted according to the magnitude of the problem, thus enabling MSB to equal MSC.
D) Firms are encouraged to find ways of reducing external costs.
E) Taxes and subsidies internalise externalities.