O-LevelEconomicsGovernment and the macroeconomy2281/11 · May/June 2013 · Q81 Mark
What is a likely reason why many countries' governments subsidise scientific research?
APrivate sector firms may overestimate the external benefits and ignore the private benefits of scientific research.
BPrivate sector firms may overestimate the external costs and ignore the private costs of scientific research.
CPrivate sector firms may underestimate the private benefits and ignore the external benefits of scientific research.
DPrivate sector firms may underestimate the private costs and ignore the external costs of scientific research.
✓ Correct answer
C: Private sector firms may underestimate the private benefits and ignore the external benefits of scientific research.
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