Answer:
C. only government regulation will solve the problem.
Explanation:
An externality is a cost or benefit that occurs with an economic activity that affects third parties, who are not engaged in the activity and also they don´t have any control over it.
Externality could be of two types:
A negative externality is a cost that affects the third party by the economic activity, however, it does not affect the party who is directly engaged in the activity. It does not impact the cost of production, so production increases. The government have to take action to resolve this problem of society.
A positive externality is a benefit of an economic activity that causes good to the third parties, who are not engaged in the activity.
