The Negative Externalities in the Petrol Market

The Negative Externalities in the Petrol Market

Introduction

They are two forms of externalities in the broader economics. They are namely the positive and the negative externalities. An externality is an uncompensated impact monetarily on the producer of a commodity but does influence the surrounding society as a whole. The positive externalities are those that bring positive impact to the society, if for example a research is done and new developments occurs due to the research it can be referred to as a positive externality. Negative externality often occurs when consumption of a certain product causes harmful effect to a third party (Baumol 310). Unluckily the negative externalities tend to occur much more than the positive ones. When the negative externalities exist in unregulated market the producers don’t take any responsibility rather they are passed to the society in large.

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