Which one of the following statements is correct regarding externalities?
A) The existence of a negative externality leads to the outcome that too little of the good will be produced.
B) Externalities lead to an efficient outcome.
C) The existence of a positive externality leads to the outcome that too much of the good will be produced.
D) Externalities occur when a decision creates costs or benefits for actors other than the one making the decision.
Correct Answer:
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