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AP® Microeconomics

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Negative Externality: Definition

APMICR-HHXNES

What is a negative externality?

A

Efficiency loss as a result of too little being produced by the market

B

The inability to satisfy all wants as a result of limited resources

C

Damage to commonly held resources because of a lack of incentives to maintain them

D

Costs imposed on individuals who are not parties to a transaction

E

Benefits to individuals would are not parties to a transaction