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A pigouvian subsidy leads to a socially efficient outcome by ________.
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A pigouvian subsidy leads to a socially efficient outcome by ________.

User Tyler
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Answer:

A pigouvian subsidy leads to a socially efficient outcome by raising individual's marginal benefit from consumption

Step-by-step explanation:

A pigouvian subsidy is a subsidy that is used to encourage behaviour that have positive effects on others who are not involved or society at large. Behaviors or actions that are a benefit to others who are not involved in the transaction are called positive externalities. This is closely related to the idea of a pigouvian tax.

User Chrismead
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