Question

A new bakery opens downtown. Which circumstance would most likely be a negative externality? A. Customers of the old bakery see a drop in prices.. . B. Neighboring stores get more foot traffic.. . C. The city government collects added tax revenue.. . D. The old bakery down the street loses some customers.

Answer 1

ANSWER D) THE OLD BAKERY DOWN THE STREET LOSES SOME CUSTOMERS.

Answer 2

The circumstance that would be a negative externality would be that the old bakery down the street loses some customers. The other choices would not be a negative thing. The correct answer is D.