A ________ externality occurs when a market transaction affects others through market prices.
A) positive
B) negative production
C) negative consumption
D) pecuniary

Question

Quizplus · Accepted Answer

A pecuniary externality occurs when a market transaction affects others through market prices. This happens when a change in the market price of a good or service affects the utility or production possibilities of others, but there is no direct physical impact or consumption of the good or service.

A ________ Externality Occurs When a Market Transaction Affects Others