Market Failure Externalities
- Created by: RP
- Created on: 14-04-13 19:03
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- Externalities
- Positive consumption externality
- Effects
- Solutions
- Granting a subsidy(subsidy = external benefit)
- Legislation and direct provision
- Advertising
- Positive production externality
- Effects
- Solutions
- Granting a subsidy(subsidy=external benefit)
- Assigning intellectual property rights
- Mergers (internalizes spillover benefits)
- Direct regulation
- Negative consumption externality
- Effects
- Solutions
- Indirect taxation (tax = external cost)
- DIrect regulation
- Advertising
- Negative production externality
- Effects
- Positive consumption externality
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