When an externality occurs governments may intervene to try to line up the social costs/benefits with the private costs/benefits. The following graph illustrates an externality in such a market. What type of government intervention would be recommended as a result of the externality indicated in the graph? Price Tax Subsidy Market Equilibrium SC PC PB Quantity
When an externality occurs governments may intervene to try to line up the social costs/benefits with the private costs/benefits. The following graph illustrates an externality in such a market. What type of government intervention would be recommended as a result of the externality indicated in the graph? Price Tax Subsidy Market Equilibrium SC PC PB Quantity
Chapter1: Making Economics Decisions
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following graph illustrates an externality in such a market. What type of government intervention would be recommended as a result
of the externality indicated in the graph?
Price
Tax
Subsidy
Market Equilibrium
SC
PC
PB
Quantity"
Transcribed Image Text:When an externality occurs governments may intervene to try to line up the social costs/benefits with the private costs/benefits. The
following graph illustrates an externality in such a market. What type of government intervention would be recommended as a result
of the externality indicated in the graph?
Price
Tax
Subsidy
Market Equilibrium
SC
PC
PB
Quantity
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