Practice: Externality

When a market is inefficient

When there is a negative production externality

In the presence of negative externalities, there is

The above curves are for an industry that produces an externality. The optimal price and quantity for society is _________ because this industry produces a _________ externality.

Since Mary often texts while she drives, she is generating a _______ to others, resulting in a shift of the supply curve to the ______.

In the presence of negative externalities, there is

An example of a negative externality is

Cigarette smoking creates a _____________externality.

In the diagram above, what is the producer surplus at the socially optimal output level?

In the presence of negative externalities, there is

When there is a negative externality due to pollution the government can intervene to