222k views
3 votes
Governments can increase the consumption of a product that creates positive externalities by

User Agendum
by
7.8k points

1 Answer

2 votes

Answer: Subsidising the production of the product so that the supply is increased and market price is reduced.

Explanation: Government subsidies for production are nothing but incentives for production or a particular product. The government can always, by its measures, influence the parameters of the production and market, which is a characteristic of the so-called mixed economies, the mixture of market economy and the influence of the government. In this sense, subsidies are a certain amount of money that the government gives to production, depending on what parameters it wants to improve, in this case, increased supply and a decrease in the price of products on the market. These may be some other incentive measures, i.e. subsidies, and the ones I mentioned relate to this particular case.

User DarckBlezzer
by
8.1k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.