Which of the following best describes a negative externality?

A negative externality occurs when an action or decision made by one person or business causes harm or costs to others who are not directly involved in that action. For example, if a factory produces goods but also releases pollution into the air, the people living nearby may suffer from health problems or have to deal with dirty air. These negative effects are not reflected in the price of the factory's products, meaning the factory does not pay for the harm it causes to others. This can lead to a situation where the factory produces too much of its product because it does not bear the full costs of its actions. Understanding negative externalities helps us see why some regulations, like pollution controls, are important for protecting the community and the environment.