QuestionJune 2, 2025

A negative externality or spillover cost occurs when Multiple Choice firms fail to achieve allocative efficiency. firms fail to achieve productive efficiency. the price of a good exceeds the marginal cost of producing it. the total cost of producing a good exceeds the costs borne by the producer.

A negative externality or spillover cost occurs when Multiple Choice firms fail to achieve allocative efficiency. firms fail to achieve productive efficiency. the price of a good exceeds the marginal cost of producing it. the total cost of producing a good exceeds the costs borne by the producer.
A negative externality or spillover cost occurs when Multiple Choice firms fail to achieve allocative efficiency. firms fail to achieve productive efficiency. the price of a good exceeds the marginal cost of producing it. the total cost of producing a good exceeds the costs borne by the producer.

Solution
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Answer

the total cost of producing a good exceeds the costs borne by the producer. Explanation 1. Identify the Definition of Negative Externality A negative externality occurs when the production or consumption of a good imposes costs on third parties not involved in the transaction. 2. Match Definition with Options The option that matches this definition is "the total cost of producing a good exceeds the costs borne by the producer," as it indicates costs are imposed on others outside the transaction.

Explanation

1. Identify the Definition of Negative Externality<br /> A negative externality occurs when the production or consumption of a good imposes costs on third parties not involved in the transaction.<br /><br />2. Match Definition with Options<br /> The option that matches this definition is "the total cost of producing a good exceeds the costs borne by the producer," as it indicates costs are imposed on others outside the transaction.
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