Which of the Following Statements Is TRUE

Multiple Choice

Which of the following statements is TRUE?
I. A Pigouvian subsidy reduces the market price to encourage consumption and correct for the underproduction of a good.
II. A Pigouvian tax increases the market price to discourage consumption and correct for the overproduction of a good.
III. Negative externalities create deadweight losses, but positive externalities do not.

A) III only
B) I, II, and III
C) I and II only
D) I only