When negative externalities are present in a market,
A)producers will be affected but consumers will not.
B)producers will supply too much of the product.
C)demand will be too high.
D)the market will still maximize total benefits.

Question

Quizplus · Accepted Answer

When negative externalities are present in a market, producers do not fully bear the costs of their actions, which can result in oversupply of the product. Consumers may also be affected indirectly through higher prices or reduced choice. The market may not maximize total benefits in this case because of the presence of external costs.

When Negative Externalities Are Present in a Market