Many detrimental externalities occur because

Question

Quizplus · Accepted Answer

Externalities occur when the cost or benefit of a transaction is not fully accounted for by the parties involved, resulting in a cost or benefit for third parties. In the case of negative externalities, such as pollution, persons do not pay the full social cost of using a resource, which includes the cost of the harm caused to others. As a result, the cost is imposed on others who did not benefit from the transaction, leading to a harmful outcome.

Many Detrimental Externalities Occur Because