Internalizing a negative externality will cause the market supply curve to shift to the left.

Question

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Internalizing a negative externality means imposing a cost on the producer for the negative impacts of their production. This can be done through taxes, regulations, or other means. By increasing the cost of production, the market supply curve shifts to the left, resulting in a decrease in the quantity supplied at any given price.

Internalizing a Negative Externality Will Cause the Market Supply Curve