A graph of market failure due to negative externalities. Taken from: Market failures and externalities. (n.d.). Types of market failure. (n.d.). Retrieved from http://economicsonline.co.uk/Market_failures/Types_of_market_failure.htmlU.S. policies that aim to correct market failures caused by negative externalities: pigou taxes and excise duties. United States, limits, regulation. Government involvement that aims to correct market failures caused by positive externalities consists of subsidies or grants. To correct market failures caused by positive externalities, the quantity supplied or quantity demanded must be increased because both create an increase in external benefits. Increasing the quantity supplied of goods that generate external benefits would mean decreasing the price costs associated with production. Increasing the demand for goods that generate external benefits would mean decreasing the price paid by consumers. For example, there is a positive externality associated with a person obtaining a higher education. By obtaining higher education, society benefits. To achieve maximum benefit, the government would like to encourage people to pursue higher education by making university entry more accessible.