Best Answer


User Avatar

Wiki User

10y ago
This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: When external costs are generated by firms the government should?
Write your answer...
Still have questions?
magnify glass
Related questions

What are the 7 functions of government?

The seven functions of government include national defense and public goods, pollution and external costs, education and external benefits, legal and social frameworks, competition, income and social welfare, and government fiscal and monetary policy.

What is the Differences between internal and external cost?

Internal costs are costs that a business bases its price on. External costs are costs that are not included in what the business bases its price on Nicodem

What are the impact of external costs and external benefits on resource allocation?

The impact of external costs and external benefits on resource allocation that business needs can be done quiet easily with perfection as distribution of resources has been done with costs and benefits effective point.

Private costs are borne by consumers of a good while social costs are borne?

Private costs can also be borne by producers. For example: A consumer buys a unit of good, the private cost of him is mainly the price of the good. A producer supplies a unit of good, the private cost of it is the cost of production. There should be no definite answer for "who bears the private cost?". Social costs = Private costs + External costs. It's born by both consumers and producers. Look up external costs in the internet.

What are the external costs associated with cellular phone usage in automobiles what are the external benefits?

do not include any copy7

What are some examples of external environmental costs?

Raw materials

What are the costs of nuclear fusion energy?

The costs of nuclear fusion energy are indeterminate, bacause we have not yet successfully generated a sustained fusion reaction.

How government can react with businesses?

If a business produces high external benefits. A government will want to encourage this by for example, giving tax reliefs or to perform nationalization. If a business produces high external costs, like a cigarette manufacturer. A government will want to discourage this, for example by putting high taxation on its products. But ironically because of the good government revenue this kind of taxation earns the government, it will try to gain a equilibrium between regulating people smoking and needing government healthcare with earning a lot from the tax imposed.

User cost of capital?

costs generated by using capital at a certain time for a certain investment, variables which influence these costs are the real interest rate, depreciation rate and costs of capital in the future

What are the internal and external factors for pricing?

There are internal and external factors for pricing. The internal factors include the manufacturing or purchasing costs while external factors depend on the demand of a product.

How did Hepburn Act Change the government's role in industry?

The Hepburn act gave the government the power to set and limit shipping costs.

Why get rid of the monarchy of Canada?

Some argue that the monarchy of Canada costs too much. However, it should be remembered that the Government of Canada does not pay the day-to-day costs of Her Majesty the Queen of Canada. Rather, the Government defrays the very modest costs of the Governor General and the Lieutenant Governors. It should also be remembered that any other head of State would most probably cost much more, when one considers the costs of the transition to a new system, and the costs of more employees for a head of State who would almost certainly have a greater democratic mandate to make partisan interventions in the daily operations of the Government.