If a good that generates negative externalities was priced to take into account these negative externalities, then its:
A)price would decrease and its output would increase.
B)output would increase but its price would remain constant.
C)price would increase and its output would decrease.
D)price would increase but its output would remain constant.

Question

Quizplus · Accepted Answer

When a good that generates negative externalities is priced to take into account these externalities, its price would increase because the cost of producing the good would increase. This increase in price would cause the demand for the good to decrease, leading to a decrease in output.

If a Good That Generates Negative Externalities Was Priced to Take