One way to correct a positive externality is for government to subsidize buyers to decrease the quantities that they are willing and able to buy at each price.

Question

Quizplus · Accepted Answer

To correct a positive externality, the government would subsidize buyers to increase the quantities that they are willing and able to buy at each price, not decrease. Positive externalities lead to underconsumption, so the goal is to encourage more consumption.

One Way to Correct a Positive Externality Is for Government