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When there is a negative externality, economists often suggest fixing the externality by placing a tax on the good with the negative externality. Which of

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When there is a negative externality, economists often suggest fixing the externality by placing a tax on the good with the negative externality. Which of the following demonstrates the logic behind this idea? The tax changes individual incentives to match social incentives The tax ensures that no externalities are produced The tax increases the amount of the good that is produced until the efficient level is reached . O The tax, set at the correct level, acts as a cap on production and disallows anyone from producing more than the efficient amount

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