Governments can increase the consumption of a product that creates positive externalities by
A)subsidizing the production of the product so that the supply is increased and market price is reduced.
B)taxing the production and consumption of the product.
C)convincing everyone to consume the product.
D)assigning property rights to the producers of the product.

Question

Quizplus · Accepted Answer

By subsidizing the production of a product with positive externalities, the government can decrease the cost of production for the producers, increasing the supply of the product and lowering the market price. This, in turn, can encourage more consumption of the product, leading to greater social benefits.

Governments Can Increase the Consumption of a Product That Creates