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A positive externality exists and government wants to apply a per-unit subsidy in order to bring ...

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A positive externality exists and government wants to apply a per-unit subsidy in order to bring ...

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)?

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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).

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none of the above

Textbook

Economics

Edition: 12^th

Author: Arnold

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frithne

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lcard044 Author

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Thanks

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I appreciate what you did here, answered it right Smiling Face with Open Mouth

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This helped my grade so much Perfect

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