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n a market where there is a positive consumption externality, the socially optimal quantity can be achieved: (a) with a tax on consumers equal to
n a market where there is a positive consumption externality, the socially optimal quantity can be achieved:
(a) with a tax on consumers equal to the size of the externality.
(b) with a subsidy equal to the marginal external benefit.
(c) with a tax on producers equal to the marginal external benefit.
(d) without any tax or subsidy, as the market quantity is always socially optimal.
(e) without any tax or subsidy, since there is no loss of either consumer surplus or producer surplus in the market.
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