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

Question

Quizplus · Accepted Answer

Pricing a good to take into account negative externalities would increase its cost, making it more expensive for consumers. This would lead to a decrease in demand and quantity. Therefore, the price would increase and its quantity would decrease.

If a Good That Generates Negative Externalities Were Priced to Take