market for Booming Berries contains a? a) Negative Externality b) Positive externality How can I tell distinguish if it contains a positive or negative externality with the given information?
market for Booming Berries contains a? a) Negative Externality b) Positive externality How can I tell distinguish if it contains a positive or negative externality with the given information?
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter22: Frontiers Of Microeconomics
Section: Chapter Questions
Problem 9PA
Related questions
Question
100%
The market for Booming Berries contains a?
a) Negative Externality
b) Positive externality
How can I tell distinguish if it contains a positive or negative externality with the given information?
Transcribed Image Text:Okay, now let's dive a little deeper into the Booming
Berries market.
Mega Beans Market
Booming Berries
Booming Berries
Clare
Booming Berries
130
Mark, you stated that during the process of harvesting
Booming Berries other crops are damaged, is that correct?
120
DO
110
100
90
Clare
80
Yes, that is the case.
70
60
50
40
Mark
30
So, from an economics perspective, the market for
Booming Berries has an impact on people who do not buy
or sell the berries.
20
DO
10
10
20
30
40
50
60
70
80
90
100
110
120
Quantity (in thousands)
Clare
That is correct, the market for Booming
Berries contains a:
Mark
Negative externality
Positive externality
Price (per pound)
Expert Solution
Step 1
Positive externality is when there is benefit occurs to the third party or people outside the transacting parties.
Negative externality is when there is disadvantage or loss to a third party or people outside the transacting parties.
In this situation,
During the process of harvesting booming berries others crops are damaged.
So this have effect on the third parties or people who do not buy or sell the booming berries.
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