Multiple Choice
When an industry is characterized by technology spillover, what should the government do to ensure that the market equilibrium equals the socially optimal equilibrium?
A) Impose a tax greater than the value of the technology spillover.
B) Not allow production of any product that causes a technology spillover.
C) Provide a subsidy equal to the value of the technology spillover.
D) Require producers to "clean up" any spillover that results from their production process.
Correct Answer:
Verified
Correct Answer:
Verified
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