Why do externalities arise

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Reference no: EM131108004

Why do externalities arise?

a. The costs of production are not borne by the producer.

b. The consumption of a public good is non excludable.

c. Goods of mass consumption are not produced as they do not yield profit for the producers.

d. An economic activity imposes a burden on those who are not directly involved in it.

e. The government produces goods and services which are consumed by only a particular group of people.

Reference no: EM131108004

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