A Negative Externality

question 292

Multiple Choice

A negative externality

• A)is an adverse impact on a bystander.
• B)causes the product in a market to be under-produced.
• C)is an adverse impact on market participants.
• D)is present in markets where the good or service does not have any impact on bystanders.

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Definitions:

Supply

The total amount of a specific good or service that is available to consumers in the market.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price over a specific time period.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price in a given period.

Demand

The quantity of a good or service that consumers are willing and able to purchase at different prices at a given time.