Who loses surplus when consumers in a market are forced to internalize a negative externality?
A)Consumers
B)Producers
C)Others affected by the externality
D)Both producers and consumers lose surplus when negative externalities are internalized.

Question

Quizplus · Accepted Answer

When negative externalities are internalized, both producers and consumers lose surplus. This is because the producers must now pay for the costs that their production imposes on others, and the consumers must pay higher prices for the goods that they purchase.

Who Loses Surplus When Consumers in a Market Are Forced