When a Positive Externality Is Present in a Market,total Surplus

question 112

Multiple Choice

When a positive externality is present in a market,total surplus is:

• A) higher when buyers receive a Pigouvian subsidy for the externality.
• B) lower when buyers receive a Pigouvian subsidy for the externality.
• C) higher when buyers only consider private benefits.
• D) Any of these statements could be true.

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