Statement I.Pollution is an example of market failure.
Statement II.Externalities can be costs or benefits.

Question

Quizplus · Accepted Answer

Statement I is true because pollution is a classic example of a market failure where the price of goods and services does not reflect the full costs of production or consumption, resulting in negative externalities such as pollution. Statement II is also true because externalities can be either positive or negative, in the form of costs or benefits, that are not accounted for in the market price.

Statement I.Pollution Is an Example of Market Failure