If a factory's pollution affects the health of nearby residents, which type of externality is this an example of?

When a factory's pollution harms the health of people living nearby, it is an example of a negative externality. This means that the factory is causing harm to others without paying for it. The residents suffer from issues like breathing problems or other health concerns because of the dirty air or water from the factory. For instance, if the factory releases smoke that makes it hard for children to play outside, the factory's actions directly affect the community's well-being. In this case, the factory does not take responsibility for the health problems it creates, which is why it is considered a negative externality.