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Externalities are called market failures because a

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Externalities are called market failures because

a. resource allocation decisions are incorrectly made with the externalities present.

b. if all costs are not paid by the producer, overproduction will occur.

c. if all benefits do not flow to the buyer of the product, underproduction will occur.

d. costs and/or benefits will go to people not involved in the transaction.

e. All of the above.