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lcard044 lcard044
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A year ago

A positive externality exists and government wants to apply a per-unit subsidy in order to bring about the socially optimal output. Under what condition will the solution (of the subsidy) be worse than the problem (the market failure)?



▸

Under the condition that the subsidy is greater than the marginal external benefit (associated with the positive externality).



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Under the condition that the post-subsidy output is not farther away from the socially optimal output than the pre-subsidy output is from the socially optimal output.



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Under the condition that the post-subsidy output is farther away from the socially optimal output than the pre-subsidy output is from the socially optimal output.



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Under the condition that the subsidy is less than the marginal external benefit (associated with the positive externality).



▸

none of the above

Textbook 
Economics

Economics


Edition: 12th
Author:
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frithnefrithne
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A year ago
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lcard044 Author
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A year ago
Thanks for your help!!
Kstan109
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This site is awesome
hannahspillett
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Correct Slight Smile TY
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