Subsidies for positive externalities always lead to a socially optimal output by eliminating the need for government intervention in the market, as they ensure that private costs align perfectly with marginal social costs.

Subsidies for positive externalities are financial support given by the government to encourage activities that have benefits for society, like education or renewable energy. While these subsidies can help align private costs with the broader social benefits, they do not always lead to a socially optimal output without ongoing government involvement. For example, if a government subsidizes solar panels, it reduces the cost for consumers, promoting more people to install them. However, without careful monitoring, the market could still face issues like oversupply or misallocation of resources. Thus, while subsidies are helpful, they often need to be part of a larger strategy that includes government intervention to ensure the best outcomes for society.