Which of the following scenarios best illustrates how government policies can correct market failure while promoting productive efficiency through economic incentives?

Government policies can correct market failures by encouraging businesses to operate more efficiently and in ways that benefit society. For example, if a factory is polluting the air, the government might impose a tax on the pollution. This tax creates an economic incentive for the factory to reduce its emissions, as it will save money by lowering the tax burden. By doing this, the factory may invest in cleaner technology, which not only helps the environment but also leads to more efficient production methods. This scenario shows how government intervention can guide businesses towards practices that are better for both the economy and the community.