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

Question

Quizplus · Accepted Answer

All of these groups would be affected. When a positive externality becomes internalized in a market, it means that the benefits of the externality are now included in the market price. This would benefit the producers as they would be able to charge a higher price for their goods or services, the consumers would benefit from the positive externality, and those affected by the externality would also benefit as they are now included in the market. Therefore, all groups would be affected in some way.

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