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Janelle Wilson
on Nov 05, 2024

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An efficient outcome can always be reached by requiring the individual who produces the externality to fully compensate individuals for any damage inflicted.

Externality Compensation

Payments or remedies provided to offset the unintended negative or positive effects imposed on third parties by the production or consumption of goods and services.

Efficient Outcome

An allocation of resources in which it is impossible to make any one individual better off without making at least one individual worse off.

  • Acquire knowledge on the notion of externalities and their influence on market efficiency.
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JM
James McClellandNov 06, 2024
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