-In the market,an externality exists.From the diagram above,one can deduce that it is a
A) negative externality.
B) positional externality.
C) positive externality.
D) positional arms race.
E) prisoner's dilemma.

Question

-In the market,an externality exists.From the diagram above,one can deduce that it is a
A) negative externality. 
B) positional externality. 
C) positive externality. 
D) positional arms race. 
E) prisoner's dilemma.

Quizplus · Accepted Answer

A negative externality occurs when the production or consumption of a good or service imposes costs on third parties not involved in the transaction, which is typically depicted in diagrams showing a divergence between private and social costs.

-In the Market,an Externality Exists