The existence of externalities in production or consumption does not negate the possibility that these goods and services can be supplied efficiently in the market.

Question

Quizplus · Accepted Answer

The presence of externalities can lead to market failure and a suboptimal allocation of resources. As a result, it may not be possible to achieve an efficient outcome through the market alone without government intervention or other corrective measures.

The Existence of Externalities in Production or Consumption Does Not