When negative externalities like pollution exist, competition leads to:

Name: When negative externalities like pollution exist, competition leads to:
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Question

Quizplus · Accepted Answer

When negative externalities exist, competition leads to more production than would be efficient because firms are only concerned with maximizing their profit, not taking into account the negative effects their production has on others. This leads to an overproduction of goods that produce negative externalities.

When Negative Externalities Like Pollution Exist, Competition Leads To