How can the provision of subsidies for public goods affect social welfare in the presence of positive externalities?

Subsidies for public goods can greatly improve social welfare, especially when there are positive externalities involved. Positive externalities occur when a good or service benefits people who do not directly pay for it, like education or clean air. By providing subsidies, the government can lower the cost of these public goods, making them more accessible to everyone. For example, if the government subsidizes public parks, more people may visit and enjoy the benefits of nature, which can lead to healthier communities and happier citizens. Overall, these subsidies encourage the provision and use of public goods, enhancing overall well-being in society.