Multiple Choice
A Pigouvian subsidy is:
A) designed to discourage activities generating externalities.
B) designed to encourage activities generating external benefits.
C) appropriate when the marginal social cost curve is above the marginal cost of production curve.
D) appropriate when the marginal social cost curve and the marginal social benefit curve intersect at an inefficient level.
Correct Answer:
Verified
Correct Answer:
Verified
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