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29 June, 06:49

A negative externality is

1. when a third party receives a benefit from an economic activity

2. when the buyer does not pay full price for a good or service

3. when the seller overcharges the buyer

4. when a third party is injured by an economic activity

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Answers (1)
  1. 29 June, 08:49
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    Answer: The correct answer is "4. when a third party is injured by an economic activity".

    Explanation: A negative externality is when a third party is injured by an economic activity.

    Negative externality refers to all kinds of harmful effects on society, generated by production or consumption activities, which are not present in its costs. Negative externalities occur when the action taken in our activities as a company, individual or family causes harmful side effects to third parties. Such effects are not incorporated in all costs. Since the highlighted negative effects are not present in the price of production or of the profit when consuming.
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