The above figure shows the marginal private benefit and marginal social cost of a college education. If society's external benefits from college graduates is $10,000 each, then
A) a subsidy of $10,000 per student paid to colleges will achieve efficiency.
B) a tax of $10,000 per student imposed on the colleges will achieve efficiency.
C) 10 million students per year is the efficient number students.
D) None of the above answers are correct.
A
Economics
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What will be an ideal response?
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