Greenhouse gas emissions are a classic example of a negative production externality.

Question

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A negative production externality occurs when the production of a good or service creates costs that are not fully reflected in the market price. Greenhouse gas emissions are a classic example of negative production externality because the production of these emissions creates costs, such as climate change, that are not fully reflected in the price of the goods or services that produce them.

Greenhouse Gas Emissions Are a Classic Example of a Negative