Question

describe how externalities can be internalised using taxes ans subsidies?​

Answer 1

Answer:

A positive externality exists when a benefit spills over to a third-party. Government can discourage negative externalities by taxing goods and services that generate spillover costs. Government can encourage positive externalities by subsidizing goods and services that generate spillover benefits.

Answer 2

Qᴜᴇꜱᴛɪᴏɴ⇒

describe how externalities can be internalised using taxes ans subsidies?

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Aɴꜱᴡᴇʀ⟹

Subsidies involve the government paying part of the cost to the firm; this reduces the price of the good and should encourage more consumption.