What are externalities? Explain with an example. – InterviewSolution

1.	What are externalities? Explain with an example.
Answer» Externalities are those which are unintentional consequences of an economic action of a firm that accrue to another firm. For example, if there is establishment of an atomic power plant, it solves power crisis. It is a positive externality. But, the pollution caused by the power plant is harmful externality.

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