In the case of a technology spillover,internalizing a positive externality will cause the supply curve of an industry to
A)shift down.
B)shift up.
C)become more elastic.
D)remain unchanged.

Question

Quizplus · Accepted Answer

Internalizing a positive externality means taking into account the benefits of the spillover effect, and incorporating them into the decision-making process of the firms. This is likely to reduce the costs of production and increase efficiency, leading to lower prices and increased output. As a result, the supply curve of the industry will shift downwards, reflecting the increased quantity of goods and services supplied at every given price level.

In the Case of a Technology Spillover,internalizing a Positive Externality