Which of the following occurs when an externality is internalized?
A) An increase in social well-being
B) An increase in private benefit
C) An increase in deadweight loss
D) An increase in returns to scale

Question

Quizplus · Accepted Answer

Internalizing an externality means that the costs or benefits of an economic activity are fully borne by the parties involved. This leads to a more efficient allocation of resources and an increase in social well-being.

Which of the Following Occurs When an Externality Is Internalized