Why do externalities mainly lead to market failure? Select the best possible option.The price equilibrium for a certain good or service does not accurately reflect the real cost or real benefit of that good or service.The benefactor of the externalities has no control over and does not choose to incur either the cost or the benefit.Individual incentives that drive market decisions may increase social costs.All of the above.

When there is an externality in a market,Group of answer choicesthe externality will move the market to an economically efficient equilibrium.the externality will cause the market price to be less than or greater than the equilibrium price.the government should use price controls to enable the market to reach equilibrium.government intervention may increase economic efficiency.

If the social benefit of consuming a good or a service exceeds the private benefit,Group of answer choicesthe market achieves economic efficiency.a negative externality exists.a positive externality exists.the sum of consumer surplus and producer surplus is maximised.

If companies who internalised an externality want to supply less at any given price compared to the original market supply, it must be a:Question 2Select one:A.Social externality.B.Positive externality. C.Negative externality.D.Network externality.

When a externality exists, the socially optimal level of output will be less than that resulting from a market.

The failure of markets to adequately protect the environment can be viewed either as a problem ofGroup of answer choicesexternalities or as a problem of private goods.externalities or as a problem of common resources.club goods or as a problem that arises when the quantity of excludable goods exceeds the socially-efficient quantity.the overprovision of public goods or as a problem of the underprovision of private goods.