Good X is a much-demanded product that gives rise to a negative externality when people consume it. The government wants to cut consumption of good X by a large amount. In which situation is the government most likely to achieve this aim?
- Aprice elasticity of demand for good X more than 1; government policy subsidy
- Bprice elasticity of demand for good X less than 1; government policy subsidy
- Cprice elasticity of demand for good X more than 1; government policy indirect tax
- Dprice elasticity of demand for good X less than 1; government policy indirect tax