Market failures sometimes lead to social regulation, particularly when the costs of a firm's behavior are not entirely borne by the firm but are passed on to other people. These failures are known as ________.

Question

Quizplus · Accepted Answer

Negative externalities occur when a firm's behavior imposes costs on others without compensation, leading to market failures. Social regulation can be implemented to address these externalities and ensure that the costs are internalized by the firm. The other options (A, C, and D) do not accurately describe this concept.

Market Failures Sometimes Lead to Social Regulation, Particularly When the Costs