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Are negative externalities considered on a microeconomics analysis? Why or why not?

Are negative externalities considered on a microeconomics analysis? Why or why not?
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Answer #1

Negative externalities are side effects of production or consumption which are faced by the third parties. Market Mechanism does not help to solve the problem of externalities.

Externalities are caused by the firms or individual units, thus these are studied under the micro economics. Micro economics studies the economic problems at the micro level or individual level.

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