Market Failure Externalities

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  • 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

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