#2. When pollution (a negative externality) is created by firms, which of the following is NOT a valid wayfor the government to restore the social optimum?a. require firms to install pollution-abatement equipmentb. require firms to change production techniques to reduce emissionsc. levy a tax on the production of the goodd. require firms to pay for the environmental damage they createe. offer a subsidy to firms to reduce their production costs

option e is the correct answer Offer a subsidy to form to reduce their production costs negative…

Answered: #2. When pollution (a negative…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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