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  3. since both taxes and subsidies create a deadweight

Since both taxes and subsidies create a deadweight loss to society, why are they used to...

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Economics

Since both taxes and subsidies create a deadweight loss tosociety, why are they used to correct negative and positiveexternalities? Ensure to explain whether society is better off orworse off and why.

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Taxes and subsidies create deadweight loss when used in isolation but in the context of externalities taxes and subsidies are used to correct the market If not done then it will create a market failure that    See Answer
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