asked 154k views
3 votes
Who are the only ones not affected when a Pigouvian subsidy is implemented for a positive externality in a market?

1 Answer

5 votes

Final answer:

The only ones not affected by a Pigouvian subsidy for a positive externality in a market are the third parties who benefit from the externality.

Step-by-step explanation:

When a Pigouvian subsidy is implemented for a positive externality in a market, the only ones not affected are the third parties who benefit from the positive externality. These third parties receive a benefit without incurring any cost, making them unaffected by the subsidy. For example, if the government provides a subsidy to consumers of flu shots to increase vaccinations, the individuals who do not receive vaccinations but benefit from reduced transmission of the flu are not directly affected by the subsidy.

answered
User Art
by
7.8k points

Related questions

1 answer
5 votes
126k views
1 answer
0 votes
5.2k views
1 answer
0 votes
37.2k views
Welcome to Qamnty — a place to ask, share, and grow together. Join our community and get real answers from real people.