Solved: How can externalities be addressed using the private sector, Microeconomics

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How can externalities be addressed using the private sector

Question:

1.Describe your understanding of externalities by providing an example of a positive externality and a negative externality.

2.Why do positive and negative externalities lead to inefficiency in the market economy?

3.How can externalities be addressed using the private sector to reduce market distortions of externalities?

4.What government policies help deal with positive and negative externalities by reducing inefficiency?

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Microeconomics: How can externalities be addressed using the private sector

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