Overview
Negative externalities are significant economic concepts that highlight the costs imposed on third parties due to the actions of individuals or businesses. These external costs can lead to market failures, where the true costs of goods and services are not reflected in their prices, resulting in ove...
Key Terms
Example: Pollution from a factory affecting nearby residents.
Example: Overproduction of goods that create negative externalities.
Example: The health costs of pollution.
Example: The cost of raw materials for a factory.
Example: A carbon tax on emissions.
Example: Subsidies for renewable energy projects.
Related Topics
Positive Externalities
Explore the benefits that affect third parties positively, such as education.
intermediatePublic Goods
Learn about goods that are non-excludable and non-rivalrous, like national defense.
intermediateEnvironmental Economics
Study the economic impacts of environmental policies and resource management.
advancedKey Concepts
external costsmarket failuresocial welfaregovernment intervention