How can an externality be negative?

1 Answer
Feb 29, 2016

Externalities are the results of doing (A) to achieve (B), but somewhere during the process, an outside party (C) gets effected as a result of A.


Some company (A) wants to build a train station so that people can commute (B), but as a result of the train station being built, people near the train station have to deal with the sound of the train entering and leaving the station on a regular basis (C).