KEY QUESTION Why are spillover costs and spillover benefits also called negative and positive externalities? Show graphically
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KEY QUESTION Why are spillover costs and spillover benefits also called negative and positive externalities? Show graphically how a tax can correct for a negative externality and how a subsidy to producers can correct for a positive externality. How does a subsidy to consumers differ from a subsidy to producers in correcting for a positive externality?
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Mehwish Aziz
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