When overfishing is the result of one company harvesting too many fish in one area, a government might decide to A) deal with the harmful spillover by regulating the fish industry

B) stop all fishing industries to address the positive spillover

C) place additional taxes on fish imports

D) ban the consumption of fish

A) deal with the harmful spillover by regulating the fish industry

Explanation:

A company harvesting too many fish, so much that running out of fish resources becomes a possibility, is an example of a negative externality: a negative impact on members of society who do not participate in any transaction with the company.

A negative externality is a justification for the government to step in and develop measures in order to correct it. One of these measures could be the regulation of the whole fish industry, or could simply deal with the specific company, for example, by imposing a fine.

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