Some have argued that diversity in communities and schools leads to positive externalities. What implications does...

Some have argued that diversity in communities and schools leads to positive externalities. What implications does this view have for the efficiency of a Tiebout equilibrium? What implications does it have for government policy?

Expert Solution

As the good in the market is generating a positive externality in the market at the market equilibrium they will be producing less than optimal output and at a higher price, this will cause deadweight loss in the market and to correct the implications the government has to provide the goods as a public good, this will increase the output of the goods in the market and lower the price.

Rahul Sunny answered 2 years ago

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