When a negative externality exists in a market, the cost to producers
A)is greater than the cost to society.
B)will be the same as the cost to society.
C)will be less than the cost to society.
D)will differ from the cost to society, regardless of whether an externality is present.

Question

Quizplus · Accepted Answer

When a negative externality exists, the cost to society includes both the private costs incurred by producers and the external costs imposed on others, making it greater than the cost to producers alone.

When a Negative Externality Exists in a Market, the Cost