The figure above shows the market for a good with an external benefit. If the government wants to grant a subsidy so that the efficient quantity is produced, the subsidy must equal ________ per unit

Refer to the scenario above. If Molly wins the auction by using her optimal bidding strategy, she will earn a surplus of ________

A) $0 B) $50 C) $14 D) $25

Government intervention

a. provides incentives to conduct business in an illegal black market b. plays no role in generating wealth c. is the best way to eliminate poverty d. does not enforce property rights