What subsidy will achieve the efficient number of students

Reference no: EM132116998

Question: The table shows the demand for university education.

The marginal cost of educating a student is a constant $4,000 a year and education creates an external benefit of a constant $2,000 per student per year.

If the government decides to subsidize private universities, what subsidy will achieve the efficient number of students?

Reference no: EM132116998

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