If external economies exist in the production of a good,the government could intervene to

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When external economies exist in the production of a good, it means that the society as a whole benefits from the production of the good, not just the producers or consumers. In this case, the demand curve for the industry should shift to the right to reflect the additional benefits to the society. The government could intervene to shift the demand curve to the right through various measures, such as subsidies for producers, advertising campaigns to promote the benefits of the good, or regulations that make the good more desirable for consumers. Taxing the industry or restricting production would not be a good solution in this case because it would reduce the overall benefits to the society.

If External Economies Exist in the Production of a Good,the