NEGATIVE EXTERNALITY
\nˈɛɡətˌɪv ɛkstˈɜːnˈalɪti], \nˈɛɡətˌɪv ɛkstˈɜːnˈalɪti], \n_ˈɛ_ɡ_ə_t_ˌɪ_v ɛ_k_s_t_ˈɜː_n_ˈa_l_ɪ_t_i]\
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Occurs when a product or decision exceeds the society's private cost. It is generally viewed as a market failure because the consumption level or the product's production exceeds society requires. A negative externality example is car pollution. As a car or truck driver, you do not account for air pollution costs from the car but society allegedly pays for air pollution costs.
By Henry Campbell Black
Word of the day
Snake's-head
- Guinea-hen flower; -- so called in England because its spotted petals resemble the scales of a snake's head.