The Following Questions Refer to the graph below.
-A tuition subsidy equal to how much will move the market to the socially optimal level of education?

Question

The Following Questions Refer to the graph below. 
-A tuition subsidy equal to how much will move the market to the socially optimal level of education?

Quizplus · Accepted Answer

The socially optimal level of education is achieved when the marginal social benefit equals the marginal social cost. The subsidy should equal the difference between the private cost and the social cost, which is T₂ - T₁.

The Following Questions Refer to the Graph Below