Which of the following is the government most likely to discourage because of the existence of externalities?

Question

Quizplus · Accepted Answer

Externalities are costs or benefits that are not reflected in the market price of a good or service. Cars that create an excessive amount of exhaust fumes impose negative externalities on society by contributing to air pollution, which can harm human health and the environment. Therefore, the government is most likely to discourage the production and use of such cars.

Which of the Following Is the Government Most Likely to Discourage