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True or false? A negative externality is an additional cost or burden placed on the seller.

True or false? A negative externality is an additional cost or burden placed on the seller.

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Answer #1

Answer: True

Negative externalities are the external negative consequences that are faced by the third party when a consumer uses a product or service. Sellers have to pay a certain amount because the usage of a product or service produces some negative externality and some costs are provided to compensate for it. For example, each amount of pollution creates, environmental taxes are applicable. These are usually borne by the producer or seller and finally it will be collected from the consumer in the form of product price.

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