One way to make consumers take a positive externality into account when making demand decisions is to:
A)place a tax on the item.
B)subsidize the purchase of the item.
C)tax the producers of the item.
D)None of these are true.

Question

Quizplus · Accepted Answer

Subsidizing the purchase of an item with positive externalities encourages consumers to take these external benefits into account by effectively lowering the price of the item for them, making it more attractive to purchase. This aligns private incentives with social benefits.

One Way to Make Consumers Take a Positive Externality into Account