A local coffee shop offers a discount for customers who bring their own cups, encouraging them to reduce waste. However, some customers leave their used cups on the sidewalk, creating litter that others must clean up. Which of the following best describes the externality created by this situation?

In this situation, the negative externality created is the litter caused by customers leaving their used cups on the sidewalk. While the coffee shop encourages people to bring their own cups to help reduce waste, some customers do not dispose of their cups properly. This leads to an unpleasant environment for others, as they have to deal with the mess and clean up the litter. For example, a passerby might enjoy their walk but find it ruined by the sight of discarded cups, which can also attract pests and create a dirty neighborhood. Therefore, the actions of a few individuals negatively impact the larger community, illustrating how personal choices can affect others.