In what circumstances will a government subsidy be most beneficial when producing good X creates externalities?
- Anegative externality caused by good X; price elasticity of demand < 1
- Bnegative externality caused by good X; price elasticity of demand > 1
- Cpositive externality caused by good X; price elasticity of demand < 1
- Dpositive externality caused by good X; price elasticity of demand > 1