Which of the following statements accurately describe the implications of negative externalities on market efficiency? Select all that apply.

Negative externalities occur when a person's or company's actions have harmful effects on others, and these effects are not reflected in market prices. This means that the true cost of a product or service isn't fully considered, leading to overproduction or overconsumption of goods that create these externalities, like pollution from factories. As a result, market efficiency is reduced because resources are not allocated in the best way for society; people may buy too much of a harmful product without realizing its true cost. For example, if a factory pollutes a river, the local community suffers from health issues and environmental damage, but the factory does not pay for these costs, leading to more pollution than what is socially optimal. In this way, negative externalities disrupt the balance of supply and demand, causing market failure.