Who is affected when a Pigouvian subsidy is imposed on a market with a positive externality?
A) Producers
B) Consumers
C) Those affected by the externality
D) All of these groups would be affected.

Question

Quizplus · Accepted Answer

A Pigouvian subsidy is designed to encourage more production or consumption of goods with positive externalities, thus affecting producers, consumers, and those benefiting from the externality.

Who Is Affected When a Pigouvian Subsidy Is Imposed on a Market