If companies who took into account an externality want to supply less at any given price compared to the original market supply,it must be a:
A) positive externality.
B) negative externality.
C) network externality.
D) social externality.

Question

Quizplus · Accepted Answer

When a company takes into account a negative externality, it means that the production or consumption of a good or service causes harm or costs to others outside of the transaction. In this case, the company will want to supply less at any given price compared to the original market supply to reduce the negative effects on others. Therefore, the correct choice is B, negative externality.

If Companies Who Took into Account an Externality Want to Supply