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Externalities Definition (Examples, Positive, Negative)

What are externalities in economics? An externality refers to a cost or benefit that is imposed onto a third party. These can come in the form of 'positive externalities' or, 'negative externalities'. What are the 4 types of externalities? The 4 types of externalities can be split between positive and negative. There are positive production and positive consumption externalities, and there are also negative production and negative consumption externalities.

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