When a Positive Externality Exists in a Market, the Distribution

Multiple Choice

When a positive externality exists in a market, the distribution of surplus received from a subsidy depends on:

A) how the subsidy is distributed among those affected by the externality.
B) whether those who are affected by the externality receive its true value.
C) where the government obtains the money it uses to pay for the subsidy.
D) None of these are true.