(14Answer
(Choose 1 answer)
Which of the following statements is correct?
A. When a market is characterized by an externality, the government can correct the market failure only in the case of positive externalities.
B. When a market is characterized by an externality, the government can correct the market failure only in the case of negative externalities.
C. When a market is characterized by an externality, the government can correct the market failure in the case of both positive and negative externalities by inducing market participants to internalize the externality.
D. When a market is characterized by an externality, the government cannot correct for externalities due to the existence of patents.
