38.7k views
1 vote
What is the proper balance between dealing with negative externalities through government regulation or through torts?

User Boggin
by
3.6k points

1 Answer

2 votes

Answer:

Government regulation is the best way to deal with negative externalities

Step-by-step explanation:

An externality is the effect of the activities ( mostly economic ) of an individual on third parties whom are not direct participants in such activities ( mostly economic ) and this externalities can be either positive or negative .

A proper balance by which Government can deal with negative externalities is by increasing taxes on the production of goods and services that leave a trail of negative externalities on third parties. that way the cost of production of such goods and service will discourage its production

User Acidernt
by
3.2k points