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hey everyone welcome to loomist in this video we'll learn about the pigluvian tax and subsidies which are government interventions to help markets with externalities reach the efficient outcome last video we learned that when there is an externality the free market equilibrium outcome is no longer efficient because it doesn't take into account the external costs and benefits with a positive externality the market transaction quantity is too low compared to the efficient outcome and with a negative externality the market transaction quantity is too high compared to the efficient outcome if we want the market to reach an efficient result we may need some market intervention policies to force the market to take into account the extra cost or benefits to external parties when determining the optimal price and quantity there are many policies designed to manipulate the market prices and incentives to correct for market failures but one of the most popular solutions is to hav

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