Suppose a Product Produces Substantial Spillover Costs

Multiple Choice

Suppose a product produces substantial spillover costs. If the government adopts a policy that forces producers to bear those costs:

A) ​the equilibrium quantity of the product exchanged will fall.
B) ​the initial misallocation of resources will be corrected.
C) ​the equilibrium price of the product will rise.
D) ​all of the above will be true.