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ntity of Aluminum 0 Price of Aluminum Demand (private value) Supply (private cost) Social cost Qoptimum Cost of pollution Equilibrium Optimum 來自 中國最大的資料庫下載 Negative Externalities in Production The intersection of the demand curve and the socialcost curve determines the optimal output level. ?The socially optimal output level is less than the market equilibrium quantity. 來自 中國最大的資料庫下載 Achieving the Socially Optimal Output Internalizing an externality involves altering incentives so that people take into account the external effects of their actions. 來自 中國最大的資料庫下載 Achieving the Socially Optimal Output The government can internalize an externality by imposing a tax on the producer to reduce the equilibrium quantity to the socially desirable quantity. 來自 中國最大的資料庫下載 Positive Externalities in Production When an externality benefits the bystanders, a positive externality exists. ?The social costs of production are less than the private cost to producers and consumers. 來自 中國最大的資料庫下載 Positive Externalities in Production A technology spillover is a type of positive externality that exists when a firm’s innovation or design not only benefits the firm, but enters society’s pool of technological knowledge and benefits society as a whole. 來自 中國最大的資料庫下載 Positive Externalities in Production... Quantity of Robots 0 Price of Robot QOPTIMUM Demand (private value) Supply (private cost) Social cost QMARKET Value of technology spillover Equilibrium Optimum 來自 中國最大的資料庫下載 Positive Externalities in Production The intersection of the demand curve and the socialcost curve determines the optimal output level. ?The optimal output level is more than the equilibrium quantity. ?The market produces a smaller quantity than is socially desirable. ?The social costs of production are less than the private cost to producers and consumers. 來自 中國最大的資料庫下載 Internalizing Externalities: Subsidies Government many times uses subsidies as the primary method for attempting to internalize positive externalities. 來自 中國最大的資料庫下載 Technology Policy Government intervention in the economy that aims to promote technologyenhancing industries is called te