Problem
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.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.