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-(Table: The Marginal Social Benefit of Computer Chips) Look at the table The Marginal Social Benefit of Computer Chips. The production of computer chips generates an external benefit in the form of a technology spillover. If the marginal social benefit is indicated by MSB, the optimal Pigouvian subsidy is equal to $10.

Question

Use the following to answer question: 
-(Table: The Marginal Social Benefit of Computer Chips) Look at the table The Marginal Social Benefit of Computer Chips. The production of computer chips generates an external benefit in the form of a technology spillover. If the marginal social benefit is indicated by MSB, the optimal Pigouvian subsidy is equal to $10.

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The optimal Pigouvian subsidy should equal the external benefit, which is the difference between the marginal social benefit (MSB) and the marginal private benefit (MPB). If the MSB is $10 higher than the MPB, the subsidy should be $10 to internalize the external benefit.

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