In the presence of positive external benefits, the efficient price to charge parents for the education of their children is

Question

Quizplus · Accepted Answer

The presence of positive external benefits means that the benefits of education spill over to society beyond the individual students and their families. As a result, the market price of education fails to take into account these positive external benefits, leading to an under-provision of education. To achieve efficiency, the price charged to parents should be less than the market price to account for the positive externalities. Therefore, choice D is the correct answer.

In the Presence of Positive External Benefits, the Efficient Price