Suppose that the production of roses generates a positive externality in that travelers enjoy the scenic beauty of the garden.An appropriate government policy yielding the efficient outcome would be a:

A) Pigouvian tax.
B) Pigouvian subsidy.
C) system of rose-production permits.
D) reduction in transaction costs.

Positive Externality

A benefit that affects a party who did not choose to incur that benefit, often discussed in the context of public goods and services.

Pigouvian Subsidy

A payment designed to encourage activities that yield external benefits.

Scenic Beauty

The visual appeal and aesthetic value of a particular landscape or location, often contributing to its desirability for recreation and tourism.