market for Booming Berries contains a? a) Negative Externality b) Positive externality How can I tell distinguish if it contains a positive or negative externality with the given information?
market for Booming Berries contains a? a) Negative Externality b) Positive externality How can I tell distinguish if it contains a positive or negative externality with the given information?
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter22: Frontiers Of Microeconomics
Section: Chapter Questions
Problem 9PA
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The market for Booming Berries contains a?
a) Negative Externality
b) Positive externality
How can I tell distinguish if it contains a positive or negative externality with the given information?
Expert Solution
Step 1
Positive externality is when there is benefit occurs to the third party or people outside the transacting parties.
Negative externality is when there is disadvantage or loss to a third party or people outside the transacting parties.
In this situation,
During the process of harvesting booming berries others crops are damaged.
So this have effect on the third parties or people who do not buy or sell the booming berries.
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