How do externalities in the production of electricity result in market failure ? Because of externalities, the market for electricity will

A. result in a surplus of electricity.

B. generate too much economic surplus.

C. provide too much electricity.

D. provide insufficient electricity.

E. result in a price for electricity that is inefficiently high.

Question

Social Studies

Daisy Buckley

8 October, 13:29

How do externalities in the production of electricity result in market failure ? Because of externalities, the market for electricity will

A. result in a surplus of electricity.

B. generate too much economic surplus.

C. provide too much electricity.

D. provide insufficient electricity.

E. result in a price for electricity that is inefficiently high.

+4

Answers (1)

Know the Answer?

Jaidyn Simmons · Answer 1

C. provide too much electricity.

Explanation:

This is because the electricity market cannot accurately know how many electricity it's providing, resulting in them providing more electricity to the people or businesses than they should, thus causing a deficit and making the electricity market lose money.