Suppose That Flower Gardens Create a Positive Externality Equal to $1

Multiple Choice

Suppose that flower gardens create a positive externality equal to $1 per plant.Further suppose that the local government offers a $1 per-plant subsidy to growers.What is the relationship between the equilibrium quantity and the socially optimal quantity of plants grown?

A) The equilibrium quantity is less than the socially optimal quantity.
B) The equilibrium quantity is greater than the socially optimal quantity.
C) They are equal.
D) There is not enough information to answer the question.