In any case where there is a positive externality, forming a government agency to solve the problem rarely results in an efficient outcome.

Question

Quizplus · Accepted Answer

Positive externalities often lead to underproduction of a good or service, and government intervention, such as subsidies or the provision of the good itself, can help achieve a more efficient outcome by aligning private incentives with social benefits.

In Any Case Where There Is a Positive Externality, Forming