When a positive externality is present in a market, total surplus is:

A. higher when buyers receive a Pigouvian subsidy for the externality.
B. lower when buyers receive a Pigouvian subsidy for the externality.
C. higher when buyers only consider private benefits.
D. Any of these statements could be true.


A. higher when buyers receive a Pigouvian subsidy for the externality.

Economics

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