A government action that can help correct positive externalities is
A) a tax on producers of the good that provides external benefits.
B) a subsidy to consumers of the good that provides external benefits.
C) an effluent fee charged to producers of the good that provides external benefits.
D) regulations aimed at reduced production by sellers of the good that provides external benefits.

Question

Quizplus · Accepted Answer

A subsidy to consumers of the good that provides external benefits will increase demand for the good and lead to an increase in production. This will help align the private and social benefits of the good, and encourage more individuals to consume it.

A Government Action That Can Help Correct Positive Externalities Is