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Economics of Environmental Innovation and Technology
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Which of the following is a common type of market failure that can lead to environmental degradation?
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A
Negative externalities
💡 Explanation:
Negative externalities occur when the production or consumption of a good or service imposes costs on third parties who are not directly involved in the transaction. This can lead to environmental degradation, as producers and consumers may not take into account the full social costs of their actions.