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Why is an externality absent from the market price?
A
Anyone affected who neither bought nor sold and had no say in the transaction.
B
Drivers pay for fuel but not for the polluted air breathed by pedestrians.
C
£490 (£400+£90£400 + £90£400+£90).
D
The market price covers only payments between the buyer and seller, not effects on third parties.
Card 1 of 25
3.8.1 Positive and negative externalities Flashcards
25 flashcards on OCR GCSE Economics 3.8.1 Positive and negative externalities: the key terms, formulae and calculations you need to recall for Component 01 and Component 02.