Question
How could you solve the examples belowof externalities to attain market efficiency? Negative externality is detrimental to those affected while positive externality is beneficial to
How could you solve the examples belowof externalities to attain market efficiency?
Negative externality is detrimental to those affected while positive externality is beneficial to the affected parties. For example a factory that is releasing untreated effluents into water source will shift the cost of cleaning the contaminated environment to the society. Example of positive externality is a person who went to education system. Not only will the person enjoy the benefits such as better job opportunities, higher productivity, and higher income but also the society will enjoythespill overbenefits. An educatedwill less likely engage in criminal activities which is a positive benefit to the society.
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