Since restored historic buildings convey a positive externality, local governments may choose to restrict demotion of them and provide tax breaks for those that choose to restore them.
A good has positive externality if the benefits to third parties not involved in production is greater than the cost. an example of an activity that generates positive externality is research and development. Due to the high cost of R & D, they are usually under-produced. Government can encourage the production of activities that generate positive externality by granting tax breaks to companies that undertake R & D.
To learn more about externalities, please check: https://brainly.com/question/26266710
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