📚 Learning Guide
Positive Externalities in Production
easy

Positive externalities in production are to societal benefits as negative externalities in production are to what?

Master this concept with our detailed explanation and step-by-step learning approach

Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose the Best Answer

A

Market failure

B

Increased profits for producers

C

Reduced demand for goods

D

Improved product quality

Understanding the Answer

Let's break down why this is correct

Answer

Positive externalities in production create benefits for society that go beyond the direct profits of a business. For example, if a company invests in renewable energy, it not only profits but also helps reduce pollution and improve air quality for everyone. In contrast, negative externalities in production lead to harmful effects on society. An example of this is a factory that releases smoke into the air; while it may generate income, it also harms the health of nearby residents. Therefore, just as positive externalities result in societal benefits, negative externalities produce societal costs that can affect people and the environment negatively.

Detailed Explanation

Negative externalities can cause market failure. Other options are incorrect because Some might think that negative effects help producers earn more; It seems like negative effects would lower demand.

Key Concepts

Positive Externalities
Negative Externalities
Market Efficiency
Topic

Positive Externalities in Production

Difficulty

easy level question

Cognitive Level

understand

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