Multiple Choice
Suppose planting flowering shrubs creates a positive externality equal to $7 per shrub. Further suppose that the local government offers a $7 per-shrub subsidy to planters. The number of shrubs that are planted is then
A) less than the socially optimal quantity.
B) greater than the socially optimal quantity.
C) equal to the socially optimal quantity.
D) There is not enough information to answer the question.
Correct Answer:
Verified
Correct Answer:
Verified
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