Multiple Choice
A corrective subsidy is:
A) designed to internalize a negative externality.
B) designed to encourage activities that generate 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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