Negative externality refers to a situation where the production or consumption of a good or service imposes costs on third parties or society as a whole. These costs, which are not accounted for by the private individuals or firms involved in the transaction, are external to the market and are thus termed externalities. They can lead to inefficiencies and market failures.
The correct definition of a negative externality is: "Negative externalities occur when the social cost of a good or service is higher than the private cost."
What is a negative externality?
negative externalities occur when the social cost of a god or service is lower than the private cost
negative externalities are goods or services that are subject to the free rider problem.
negative externalities occur when the social cost of a good or service is higher than the private cost
negative externalities are goods or services that one consumer can limit anothers consumer's use of
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