A negative externality is created if
A) An action harms someone not involved in the market transaction
B) An action benefits someone not involved in the market transaction
C) Neither helps nor hurts someone not involved in the market transaction
D) An action benefits someone involved in the market transaction

Question

Quizplus · Accepted Answer

A negative externality occurs when an economic activity generates harmful effects on unrelated third parties, who are not participants in the market transaction.

A Negative Externality Is Created If