Question

A negative externality or spillover cost occurs when Multiple Choice the price of a good exceeds the marginal cost of producing it. firms fail to achieve allocative efficiency. firms fail to achieve productive efficiency. the total cost of producing a good exceeds the costs borne by the producer.

Answer 1

A negative externality or spillover cost occurs when  the total cost of producing a good exceeds the costs borne by the producer.

• Spillover costs, commonly referred to as "negative externalities," are losses or harm that a market transaction results in for a third party. Even though they were not involved in making the initial decision, the third party ultimately pays for the transaction in some way, according to Fundamental Finance.
• An incident in one country can have a knock-on effect on the economy of another, frequently one that is more dependent on it, known as the spillover effect.
• Externalities are the names for these advantages and costs of spillover. When a cost spills over, it has a negative externality. When a benefit multiplies, a positive externality happens. Therefore, externalities happen when a transaction's costs or benefits are shared by parties other than the producer or the consumer.

Thus this is the answer.

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