Who is affected when a negative externality becomes internalized in a market?
A)Producers
B)Consumers
C)Those affected by the externality
D)All of these groups are affected when it becomes internalized.

Question

Quizplus · Accepted Answer

When a negative externality becomes internalized in a market, all of these groups (producers, consumers, and those affected by the externality) are affected. Producers may experience increased costs due to the internalization, consumers may face higher prices or reduced availability of the product, and those affected by the externality (such as individuals impacted by pollution or traffic congestion) may see a reduction in negative consequences.

Who Is Affected When a Negative Externality Becomes Internalized in a Market