what conditions do markets fail? - mht failshodber 16. Illustrate each of the following and identify the market and efficient outputs or outcomes. - case of no negative externality or positive externality -- case of a negative externality -- case of a positive externality 17. It is unlikely that government can perfectly solve for a negative externality through the use of a tax. Why? Explain and diagrammatically represent your answer. 18. It is unlikely that government can perfectly solve for a positive externality through the use of a subsidy. Why? Explain and diagrammatically represent your answer. 19. Prove that a tax on production will shift the supply curve upward and to the left and that the vertical distance between the supply curve with the tax and without the tax is equal to the tax.
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