Externalities are generally reflected in market prices.

Name: Externalities are generally reflected in market prices.
Brand: Quizplus
Rating: 4.8 (47 reviews)

Question

Quizplus · Accepted Answer

Externalities are costs or benefits that are not reflected in market prices. This is because they affect parties who were not involved in the original transaction, so the market price does not take them into account. As a result, externalities can lead to market failures where the market fails to allocate resources efficiently.

Externalities Are Generally Reflected in Market Prices