Question

Industrial pollution is an example of _______.

Select one:

a. positive demand-side externality

b. negative supply-side externality

c. no externality

d. negative demand-side externality

e. positive supply-side externality

Answer 1

Option B.

• Negative externalities refers to those actions of firms or individuaIs that affect the third parties who were not directly involved. Examples of negative externalities include pollutions like air, water, noise etc.
• Industrial pollution is an example of negative supply side externality as the production activities of the firms for the supply of their goods and services creates excess pollution in the surroundings which negatively affects all the people who stay near by.