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Assume that university education is supplied by private colleges and provides a positive externality to society. The demand and supply for university education are the
Assume that university education is supplied by private colleges and provides a positive externality to society. The demand and supply for university education are the following (P represents thousands of dollars of fees, and Q represents thousands of students): Demand:P = 90 - Q Supply:P=33+Q. The government decides that the "optimal" number of students is 46.5 thousand. To achieve this goal, the government could A. provide students with a scholarship of $72.00 thousand dollars. B. provide universities with a subsidy of $36 thousand dollars per student. C.provide students with a scholarship of $43.50 thousand dollars. D.cap university fees at $43.50 thousand dollars. E.None of the other answers
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