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Thanks for you great videos!Regarding the Pigouvian subsidy, isn't it too much so that we get $75 social efficient profit + $150 subsidy = $225 profit for honey producer? Shouldn't we subsidy only the difference between H* and H^ ($100-$75 = $25)?
Thanks for you great videos!
Regarding the Pigouvian subsidy, isn't it too much so that we get $75 social efficient profit + $150 subsidy = $225 profit for honey producer? Shouldn't we subsidy only the difference between H* and H^ ($100-$75 = $25)?