What would be a reason for a government not to intervene with a particular externality?

(A) Some citizens are not affected by the externality.

(B) The externality is well established and not a surprise to the market.

(C) The externality is not large enough to justify the costs of intervening.

(D) The externality does not affect those actually engaged in market activity.

Question

Cash Watkins

Business

16 June, 21:42

What would be a reason for a government not to intervene with a particular externality?

(A) Some citizens are not affected by the externality.

(B) The externality is well established and not a surprise to the market.

(C) The externality is not large enough to justify the costs of intervening.

(D) The externality does not affect those actually engaged in market activity.

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Answers (1)

Know the Answer?

Trinity Brown · Answer 1

(B) The externality is well established and not a surprise to the market.

Explanation:

The local governments do not intervene in any sort of externality in the market s the knowledge that its a well established and a large scale market that can have implications on the internal functioning of the organization and is usually affected by many factors like the demand and supply of the market. Various factors like political, economic, demographical, technological and social are in close association with these externalities prevail in the market.