Which of the following is true?

Question

Quizplus · Accepted Answer

Externalities are a common occurrence in society and can be created by various entities such as public institutions (e.g. pollution caused by government-run factories), private firms (e.g. emissions from factories), and even individual consumers (e.g. littering). Therefore, choice D is the correct answer. A is incorrect because while competitive markets can lead to efficient outcomes, they may not fully internalize externalities without government intervention. B is incorrect as historical evidence suggests that nonmarket economies have often been associated with significant environmental damage. C is also incorrect because externalities are a real problem that policy makers actively try to address through regulations and pricing mechanisms.

Which of the Following Is True