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Externalities: Difference between revisions
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[[File:Negative externality.jpg|alt=Negative externality|thumb|Figure 1. Some examples of Negative externalities.]] | |||
'''An externality is a cost or benefit caused by a producer that is not financially incurred or received by that producer. An externality can be both positive or negative and can stem from either the production or consumption of a good or service. The costs and benefits can be both private—to an individual or an organization—or social, meaning it can affect society as a whole. In business, if an entity is looking to maximise profit it will aim to privatise profits and socialise the losses.''' | '''An externality is a cost or benefit caused by a producer that is not financially incurred or received by that producer. An externality can be both positive or negative and can stem from either the production or consumption of a good or service. The costs and benefits can be both private—to an individual or an organization—or social, meaning it can affect society as a whole. In business, if an entity is looking to maximise profit it will aim to privatise profits and socialise the losses.''' | ||