When negative externalities occur as a result of a product market's activity, the market will _____ than is desirable.
A)function further from equilibrium
B)charge a higher price
C)produce more
D)produce less

Question

Quizplus · Accepted Answer

When negative externalities occur, it means that not all costs of production are borne by the producer or included in the price of the product. This often leads to overproduction relative to the socially optimal level, because the market does not account for the external costs imposed on society.

When Negative Externalities Occur as a Result of a Product