Why do externalities cause market failures

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Reference no: EM134033610

Question

1. Why do Externalities cause market failures ? How ?

2. Give one example of a negative externality and explain briefly.

3. Give one example of a positive externality and explain briefly.

4. What is a free rider ? Does it apply to a negative or positive externality ? Why is it mostly associated with public goods ?

Reference no: EM134033610

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