What are externalities
A)side effects passed on to a party other than the buyers and sellers in the market
B)external forces that help establish equilibrium price
C)external forces that cause the price of a good to be higher than it otherwise would be
D)side effects of government intervention in markets

Question

Quizplus · Accepted Answer

Externalities are side effects of a transaction that are not accounted for in the price and affect parties other than the buyers and sellers in the market. They can be positive or negative and can result in market failure, as the market price does not reflect the full social costs or benefits of the transaction.

What Are Externalities