Final answer:
Julia represents C) 'latent demand' for sustainable goods and services aimed at controlling pollution, a demand that exists despite appropriate products not being widely available. Addressing pollution as a negative externality can include various regulatory and market-based interventions.
Step-by-step explanation:
Julia's willingness to pay extra for goods and services that use sustainable processes to help control pollution is an example of C) latent demand.
Latent demand refers to a situation where demand exists, but a suitable product or solution is not available in the market.
In the context of controlling pollution, Julia and others like her represent a market demand for sustainable alternatives that might be currently underserved by existing products and services.
Pollution, as a negative externality, is a cost incurred by society due to the production and consumption of goods and services that is not reflected in market prices.
There are various ways to address these externalities, such as implementing command-and-control regulations, levying pollution taxes, or issuing tradable permits for pollution, all aimed at reducing the social costs of pollution and encouraging more sustainable practices.