Discuss the relative merits of controlling negative


Question: Discuss the relative merits of controlling negative external effects such as pollution by:

(a) setting up markets to internalise the external cost;

(b) taxes or subsidies to eradicate the gap between marginal private and marginal social cost;

(c) direct regulation of the quantity of the externality produced.

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Macroeconomics: Discuss the relative merits of controlling negative
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