How do positive externalities in production contribute to social welfare and environmental sustainability?

Positive externalities in production occur when a company's activities benefit others outside of its own business, leading to increased social welfare and environmental sustainability. For example, when a factory invests in cleaner technology, it not only reduces pollution but also improves air quality for nearby communities. This cleaner environment can lead to better health for residents, less healthcare costs, and a higher quality of life overall. Additionally, when businesses adopt sustainable practices, they can inspire other companies to do the same, creating a ripple effect that promotes environmental responsibility. Ultimately, these positive outcomes contribute to a healthier society and a more sustainable planet, benefiting everyone in the long run.