Negative externality occurs when
A)The production of a good harms third parties
B)The production of a good helps third parties
C)A buyer is sold inferior and damaged merchandise
D)The consumption of a good helps third parties

Question

Quizplus · Accepted Answer

Negative externality occurs when the production or consumption of a good or service harms third parties who are not involved in the transaction. For example, pollution from a factory can harm the health of nearby residents, who have no control over the factory's activities.

Negative Externality Occurs When