To Internalize a Negative Externality

Multiple Choice

To internalize a negative externality:

A) ​a producer's costs could be reduced by an amount equal to the external cost resulting from the production of a good.
B) ​a producer's costs could be increased by an amount equal to the external cost resulting from the production of a good.
C) ​a producer could receive a subsidy equal to the external cost resulting from the production of a good.
D) ​None of the above are correct.