Which of the Following Is a True Statement

Which of the following is a true statement?

A) Externalities cannot be solved by market solutions and always require government action.
B) Externalities would never be a problem if people were willing to comply with government regulations.
C) Voluntary agreements can solve externality situations by making the party incurring the costs bear the costs of his or her actions.
D) Externalities can only be handled by government regulation and emission taxes cannot work effectively.

Correct Answer:

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