Why Do Private Markets Fail to Account for Externalities

question 121

Multiple Choice

Why do private markets fail to account for externalities

• A)The effect of externalities are difficult to measure in private markets.
• B)Sellers include costs associated with externalities in the price of their products.
• C)Decision makers in the market fail to take into account the external effects of their behaviour.
• D)The government can easily correct any adverse effect on the market that externalities may cause.

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Definitions:

Vendors

Individuals or companies that sell goods or services, often in a specific marketplace or industry.

Self Competency

The belief in one's ability to execute tasks and manage situations effectively.

Predictable Situations

Circumstances or outcomes that can be anticipated based on existing patterns or known factors.

Organizational Resistance

Opposition or pushback from within an organization against changes or new policies.