What Is An Example Of Externality?

What Is An Example Of Externality?
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  1. A common example of externality can be seen from an industry who is producing its product and impacting the nature negatively with the pollution emitted by the production. This pollution will not only impact the area of the firm but also the area around it and society living nearby is effected. Similarly if a firm constructs a garden then it would be a positive externality as it would not just benefit the firm but also the surrounding area and environment subsequently.

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