True or false? Internalizing a negative externality will cause an industry to decrease the...

Question:

True or false? Internalizing a negative externality will cause an industry to decrease the quantity it supplies to the market and decrease the price of the good produced.

Negative Externalities

Negative externalities occur whenever a third person in any area, even after not being involved in an activity or production of a certain product, gets affected badly, which can cause harm. The governments of their respective countries nowadays are taking action to reduce the growth of negative externalities.

Answer and Explanation: 1

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The given statement is false

Reason: The government internalizes negative externalities by imposing huge taxes upon the products, which tend to harm...

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Tax Structures: Types & Concept

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Chapter 5 / Lesson 9
20K

Learn about tax structures and see how they work. Explore three types of tax structures, including regressive tax, progressive tax, and proportional tax structures.


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