what type of government policy is generally used when a positive externality is present?
In the case of a good or service involving a positive externality, government might cope in an analogous fashion by offering to pay subsidies to the producers or consumers of the good or service in question in order to encourage an appropriate expansion of production, or by using government's power to compel obedience without first negotiating mutually agreeable terms of cooperation among the affected parties, government might avoid the sizable transaction costs that would be involved in ...