It is generally difficult or impossible for private markets to take externalities into account because:
A)decision makers in the market fail to take account of the spillover effects of their behaviour
B)buyers and sellers in private markets are only interested in social wellbeing
C)people are only interested in short-term gains
D)governments are responsible for externality problems

Question

Quizplus · Accepted Answer

Private market transactions involve only the buyers and sellers directly involved in the transaction, with little regard for external parties who may be affected by the transaction. This failure to take externalities into account leads to market inefficiencies and negative social welfare impacts.

It Is Generally Difficult or Impossible for Private Markets to Take