The market will _______________ a good that generates a negative externality (and no concurrent positive externality) because the market will fail to voluntarily include the marginal _______________ in its calculations.

Question

Quizplus · Accepted Answer

The market tends to overproduce goods that generate negative externalities (like pollution) because it fails to account for the external costs (harm to third parties) in its production decisions.

The Market Will _______________ a Good That Generates a Negative