Multiple Choice
An externality arises when a person engages in an activity that influences the well-being of
A) buyers in the market for that activity and yet neither pays nor receives any compensation for that effect.
B) sellers in the market for that activity and yet neither pays nor receives any compensation for that effect.
C) bystanders in the market for that activity and yet neither pays nor receives any compensation for that effect.
D) Both (a) and (b) are correct.
Correct Answer:
Verified
Correct Answer:
Verified
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