-In the above figure, in order to promote an efficient allocation of resources, the government could grant a subsidy equal to
A) zero.
B) $5 per unit.
C) $10 per unit.
D) $15 per unit.

Question

-In the above figure, in order to promote an efficient allocation of resources, the government could grant a subsidy equal to
A) zero. 
B) $5 per unit. 
C) $10 per unit. 
D) $15 per unit.

Quizplus · Accepted Answer

A subsidy of $10 per unit would align the private cost with the social cost, promoting an efficient allocation of resources by correcting the market failure.

-In the Above Figure, in Order to Promote an Efficient