Who is affected when a subsidy is imposed on a market with a positive externality?
A)Producers
B)Consumers
C)Those affected by the externality
D)All of these groups would be affected by a subsidy.

Question

Quizplus · Accepted Answer

Subsidies in markets with positive externalities benefit all involved parties: producers receive financial support, making it more feasible to produce the good or service; consumers benefit from potentially lower prices and increased availability of the good or service; and those affected by the positive externality benefit indirectly from the increased consumption or production of the good or service that generates the positive external effects.

Who Is Affected When a Subsidy Is Imposed on a Market