Externalities are fundamentally the result of

A) the absence of competition in a market.
B) the lack of well-defined or enforced property rights.
C) poor information on the part of consumers.
D) the presence of significant comparative advantages in production.

Externalities

Economic side effects or by-products that affect uninvolved third parties; can be negative (like pollution) or positive (like education benefits), and are not reflected in market prices.

Property Rights

Legal rights to own, use, and dispose of assets or resources, playing a critical role in determining the allocation and use of resources in an economy.

Enforced

Imposed by authority or law, ensuring compliance or obedience through the application of rules or regulations.