📚 Learning Guide
Positive Externalities in Production
easy

Positive externalities in production can lead to benefits for __________ who are not directly involved in the transaction.

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Learning Path
Learning Path

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

Choose the Best Answer

A

producers

B

consumers

C

third parties

D

competitors

Understanding the Answer

Let's break down why this is correct

Answer

Positive externalities in production occur when the actions of a producer create benefits for others who are not directly involved in the buying or selling of the product. For example, when a company invests in eco-friendly technology, it not only improves its own production process but also contributes to a cleaner environment. This cleaner air and reduced pollution can benefit the local community, even if they are not customers of the company. These benefits can lead to healthier residents and lower healthcare costs, showing how one business's efforts can positively impact society as a whole. Thus, positive externalities highlight the importance of considering the wider effects of production activities beyond just the immediate economic transaction.

Detailed Explanation

Third parties are people who are not part of the main deal. Other options are incorrect because Producers are the ones making the goods; Consumers buy the products.

Key Concepts

Positive Externalities
Production
Societal Welfare
Topic

Positive Externalities in Production

Difficulty

easy level question

Cognitive Level

understand

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