Thousands of people develop lung cancer from second-hand exposure to cigarette smoke. This is an example of

A) a market failure caused by an externality.
B) a market failure caused by market power.
C) a market failure caused by equality.
D) There is no market failure in this case.

Second-Hand Exposure

Second-hand exposure relates to the involuntary exposure to substances or conditions (such as second-hand smoke) by individuals who are not directly using or engaging in the activity.

Externality

An external effect, either positive or negative, on a party not involved in a transaction or activity.