Question

Can you introduce one case regarding the positive externality, and explain it with details? How does the externality impact the company’s project, and how you evaluate it? please, show more detail. And show reference

Answer 1

Externalities refer to the positive ammendment or evolvment that helps related parties without them incurring cost.

For example there is a parent company having 2 subsidiaries. Because of the technical innovation in subsidiary A which concentrates on FMCG sector, its revenues get increased but due to that innovation, the second subsidiary which focus on Industrial sector, its revenues are increased too as they were able to use the same technology without paying for it

This is positive externality.

I hope this makes sense

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