Arrange the following steps to analyze the impact of a negative externality, such as pollution, on market efficiency: A) Identify the external cost imposed on third parties B) Assess the market equilibrium without external costs C) Propose policy interventions to correct the market failure D) Re-evaluate the new equilibrium after interventions

To analyze the impact of a negative externality like pollution on market efficiency, we first assess the market equilibrium without external costs. This helps us understand how the market operates in an ideal situation. Next, we identify the external cost imposed on third parties, such as health problems caused by pollution, which shows the negative effects not reflected in the market price. After recognizing these costs, we can propose policy interventions, like taxes or regulations, to correct the market failure. Finally, we re-evaluate the new equilibrium after implementing these interventions to see if they effectively reduce the negative externality and improve overall market efficiency.