Externality

What Does It Mean?
What Does Externality Mean?
A consequence of an economic activity that is experienced by unrelated third parties. An externality can be either positive or negative.
Investopedia Says
Investopedia explains Externality
Pollution emitted by a factory that spoils the surrounding environment and affects the health of nearby residents is an example of a negative externality. An example of a positive externality is the effect of a well-educated labor force on the productivity of a company.
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