An better from the Investopeia page , externalities are a concept in economics that refers to side effects or impacts arising from an economic activity or the production of certain goods or services, which affect parties who are not involve in the transaction. This concept can be positive or negative, depending on whether the impact is beneficial or detrimental to parties not involve. An example of a positive externality is when a company builds a beautiful city park around its facilities.
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Even though the company does not generate income from the park, local residents can enjoy the beauty and coolness of the park. This is an example of a positive externality, where the side effects of a company’s activities provide benefits to third Malaysia Mobile Number Database parties. Meanwhile, an example of a negative externality is air pollution produce by factories. Factories may increase production without considering the impact of pollution. Those living near the factory may be expose to air pollution and face health risks.
Produce smoke that is harmful
This is an example of a negative externality, where the side effects of a company’s activities harm third parties. These concepts are often of concern in Malaysia Whatsapp Number economics because they can interfere with the efficient allocation of resources and result in market imperfections. Therefore, it is important for public policies and regulations to consider this concept in order to achieve better social welfare. Also read: Understanding Bank Indonesia Certificates and their Impact on the Country’s Economic Stability Benefits of Economic Externalities Benefits of Economic Externalities illustration of economic externalities.
