Explain why, in the absence of governmental environmental regulation, competitive markets overproduce goods whose production involves the creation of negative externalities. Provide an example of a good that generates a negative externality.
Explain why, in the absence of governmental environmental regulation, competitive markets overproduce goods whose production involves the creation of negative externalities. Provide an example of a good that generates a negative externality.
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter30: Market Failure: Externalities, Public Goods, And Asymmetric Information
Section: Chapter Questions
Problem 8QP
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Explain why, in the absence of governmental environmental regulation, competitive markets overproduce goods whose production involves the creation of negative externalities. Provide an example of a good that generates a negative externality.
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