answersLogoWhite

0

What is true about an externality?

Updated: 4/28/2022
User Avatar

Wiki User

12y ago

Best Answer

It can be either positive or negative.

User Avatar

Wiki User

12y ago
This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: What is true about an externality?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Related questions

Is it true or false that noise pollution from a racetrack is an example of a positive externality?

False; noise pollution form a race track is not an example of positive externality. It is more likely an example of negative externality.


If a market generates a negative externality the social cost curve is above the supply curve true or false?

true


State three possible causes of market failure?

Externality - Negative Externality And Positive Externality the positive externality is a cause of a market failure because producers do not take the benefits of externality into account to society, therefore they under-produce the good that generates it , a negative externality happens where MSC > MSB. Factor Immobility And Market Power .


What are the relationships between market failure and externality?

externality is a type of market failure


Can you use externality in a sentence?

An externality launch feature of the space shuttle are its fuel pods.


Internalize an Externality?

to compensate an externality if it is an external cost then taxes will be imposed if it is an external benefit then subsidies will be imposed.


Which of these is a problem of privatization price effec unemployment externality?

Externality is the problem of privatization because once national treasure can be sold to the foreigners.


An example of an externality is the impact of?

Externality refers to the action of a person on a bystander's well-being. A simple example of eternality is the effect of our actions to a bystander.


What is an amplified example of negative externality in economics?

A more definitive answer to an example of a negative externality is as follows. When the production of a product generates pollution, there are costs that fall onto society in addition to those of the producer. This may have the social cost exceed the private cost of production. This brings us to the term of total surplus. In this example, total surplus is the value to consumers minus the true social cost. With this said, it boils down to this: when the benefit to society is less than the weight of the externality, it is a sure negative.


Would you classify pollution as a positive or a negative externality?

Negative.


What is market externality?

It is the forces outside of an organization that control a market.


How does an externality relate to socially optimal quantity?

In the presence of an externality (positive or negative), individual economic actors produce a socially inefficient amount of a good (since they do not include social gains or costs in their calculations). Thus, in general, when there is a Negative externality, firms are overproducing a good with a social cost and thus the optimal equilibrium occurs at decreased production. Positive externality, firms are underproducing a good with a social benefit and thus the optimal equilibrium occurs at increased production.