A price change will NOT cause:

Question

Quizplus · Accepted Answer

An externality is a cost or benefit that is not accounted for in the price of a good or service and is instead passed on to a third party. A price change may indirectly affect the occurrence of externalities, but it does not directly cause them. Therefore, option D is the correct answer. On the other hand, a change in price will cause a change in the quantity demanded and will result in the quantity supplied to adjust accordingly. Additionally, a change in price may affect the purchasing power of money, but this is not a direct result of the price change.

A Price Change Will NOT Cause