Air pollution from burning fossil fuels causes damages to crops and public health. This is an example of a market failure caused by an externality. a market failure caused by market power. a market failure caused by equality. There is no market failure in this case.

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Business

Gypsy

24 July, 14:51

Air pollution from burning fossil fuels causes damages to crops and public health. This is an example of a market failure caused by an externality. a market failure caused by market power. a market failure caused by equality. There is no market failure in this case.

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Erika Cohen · Answer 1

Answer: Option (a) is correct.

Explanation:

Air pollution is created from burning of fossil fuel which causes damages to the crops and health of the people. This is a negative externality that is generated by burning fossil fuels.

Externality is a side effect of an activity that is operated by a particular industry or people which affects the other parties and this cost is not included in the cost of goods and services.

There are two types of externalities; Positive and Negative externality.

Negative externality refers to the externality that affects the other parties in a negative way. For example, smoking.

Positive externality refers to the externality that affects the other parties in a positive way. For example, Education.