Where there are spillover (or external)benefits from having a particular product in a society, the government can make the quantity of the product approach the socially optimal level by doing the following, except
A)subsiding the buyers of the product.
B)taxing the sellers of the product.
C)subsidizing the sellers of the product.
D)providing the product itself.

Question

Quizplus · Accepted Answer

Taxing the sellers of the product would actually decrease the quantity produced, moving it away from the socially optimal level, rather than increasing it to match the social benefits. Subsidies and government provision can help align private market outcomes with socially optimal levels when there are positive externalities.

Where There Are Spillover (Or External)benefits from Having a Particular