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(b) Explain what negative externalities are, and why there may be a case for government intervention to address them.

19 / 01 / 2019 Economics

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Identify the key characteristic of four market structures (ie. monopoly, oligopoly, perfect competition or monopolistic competition). Give a case study example of each market structure. 
(b) Explain what negative externalities are, and why there may be a case for government intervention to address them. Describe any two ways to correct the negative externalities and the pros and cons of each method. Provide real life examples. 
(c)  Choose a case study from your home country where an externality exists in a current market. Illustrate the situation with externalities in your case study and the resulting deadweight loss in a diagram and discuss ways that your government has addressed the presence of negative externalities in the market. 


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