A negative externality
A)is an adverse impact on a bystander.
B)causes the product in a market to be under-produced.
C)is an adverse impact on market participants.
D)is present in markets where the good or service does not have any impact on bystanders.

Question

Quizplus · Accepted Answer

A negative externality causes harm or imposes costs on people who are not part of the market transaction. This harm is referred to as an adverse impact on a bystander.

A Negative Externality