Examine the various ways of correcting market failure due to externalities?.
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To accomplish ideal allocation of resources even with externalities, Pigou recommended social control measures and the utilization of taxes and subsidies. The state can meddle in all instances of outside diseconomies of generation to evacuate the uniqueness amongst private and social costs and benefits.
The state ought to support the generation of goods with positive externalities by the grant of the endowment on per unit of a commodity to the producer. It can help buyers in augmenting their fulfillments by imposing concessions with the goal that they consume more products. On account of negative externalities, it ought to dishearten their utilization and production by leaving taxes.
The state ought to support the generation of goods with positive externalities by the grant of the endowment on per unit of a commodity to the producer. It can help buyers in augmenting their fulfillments by imposing concessions with the goal that they consume more products. On account of negative externalities, it ought to dishearten their utilization and production by leaving taxes.
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Externalities will lead to “market failure” because the price of a commodity does not give a true picture of the cost and benefits. Negative externalities has adverse effect on the consumer and Positive externalities on the producer. The tax levied from the emission of carbon or “cigarettes” can be used for the purpose of motivating those NGO who are fighting against “Green House Gases” & “Carbon gases”.
he money in the form of Income Tax obtained from the educated individuals can be used for enhancing the education of the rural people
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