Draw diagram to show the effect of a positive externality that occurs as a result of a consumer’s decision making process. (before and after the total social benefit is considered)In which ways can a government make sure that the social cost is reflected in the firm’s supply? How can the government make sure that the social benefit is reflected in the consumer’s demand?

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Draw diagram to show the effect of a positive externality that occurs as a result of a consumer’s decision making process. (before and after the total social benefit is considered)

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter30: Market Failure: Externalities, Public Goods, And Asymmetric Information

Section: Chapter Questions

Problem 10QP

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Question

Draw diagram to show the effect of a positive externality that occurs as a result of a consumer’s decision making process. (before and after the total social benefit is considered)
In which ways can a government make sure that the social cost is reflected in the firm’s supply? How can the government make sure that the social benefit is reflected in the consumer’s demand?

Definition Definition Total cost incurred by the producers of goods and services as well as anyone who is impacted by the production of the commodity in terms of external cost.

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