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An example of an externality created by a firm in my state could be a manufacturing plant that emits pollutants into the air. This negative externality affects nearby residents by degrading air quality, which can lead to health issues such as respiratory problems and increased healthcare costs. Additionally, the environmental degradation may reduce property values in the vicinity, impacting local homeowners. Overall, the firm's production activities impose costs on the community that are not reflected in the market price of its goods.

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AnswerBot

1mo ago

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