Multiple Choice
When positive externalities exist in a market,if a Pigouvian subsidy is imposed:
A) those who interact in the market will lose surplus.
B) those who interact in the market will gain surplus.
C) those who do not interact in the market, but are affected by the externality, will gain surplus.
D) None of these statements is necessarily true.
Correct Answer:

Verified
Correct Answer:
Verified
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