The producers of externalities prefer _____ to _____.
A)corrective taxation;regulation
B)regulation;subsidization
C)competition;subsidization
D)regulation;corrective taxation

Question

Quizplus · Accepted Answer

The producers of externalities, who cause harm or benefit to others without being compensated or penalized, prefer regulation rather than corrective taxation. This is because regulation sets a specific standard or limit on their behavior, giving them more certainty about the costs and benefits of their activities. In contrast, corrective taxation imposes a tax on the activities that generate negative externalities, according to how much harm they cause, which can be uncertain and create more administrative costs for businesses. Therefore, the producers of externalities prefer regulation as a more predictable and less costly way to comply with environmental and social standards.

The Producers of Externalities Prefer _____ to _____

The Producers of Externalities Prefer _ to _