If external benefits are not integrated into the market,insufficient quantities of a product will be produced.

Question

Quizplus · Accepted Answer

External benefits, such as positive effects on society or the environment, are not reflected in the market price and therefore do not incentivize producers to supply an optimal quantity of the product. Without intervention, the market may underproduce the product, leading to inefficiencies and missed opportunities for positive externalities.

If External Benefits Are Not Integrated into the Market,insufficient Quantities