A negative externality affect market efficiency in a manner similar to ?
Correct answer: C. a common resource
- A. an excludable good.
- B. a private good
- C. a common resource
- D. a public good.
Explanation
A negative externality imposes an outside cost and leads to overuse of a resource, much like the depletion of a common resource in the tragedy of the commons. The other options do not specifically capture this overconsumption problem.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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