Purchase Solution

Externality

Not what you're looking for?

Ask Custom Question

What is an externality?
Why might externalities lead a firm to discharge too much pollution into a river?
Congress has passed a law that limits the level of cotton dust within textile factories. Why might a textile firm allow too much cotton dust within it workplace?

Purchase this Solution
Solution Summary

This discusses the impact of externality on organizations

Solution Preview

An externality is a spill over from an economic activity. It is often referred to as a by-product of the market mechanism (supply equals demand). Negative externalities are often viewed as examples of market failure, in other words, the market mechanism creates a level of consumption / production that is higher than ...

Purchase this Solution
Free BrainMass Quizzes
Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Lean your Process

This quiz will help you understand the basic concepts of Lean.

View More Free Quizzes
Related BrainMass Solutions

  • Externality

    253979 Positive externality and another of a negative externality What is an externality? Can you give an example of a positive externality and another of a negative externality?

  • externalities on the sales of condominiums

    one article should discuss a positive externality, and one should discuss a negative externality.

  • Which of the following is not an example of an externality?

    486440 Which of the following is NOT an example of an externality? Which of the following is NOT an example of an externality? Explain why the other examples are externalities and why the one you selected is not.

  • Externalities: A summary

    When there's a positive externality, marginal social benefit is greater than marginal private benefit. When there's a negative externality, marginal social cost is greater than marginal private cost.

  • An Example of an Externality

    Since the donors may regard the positive externality of public television desirable, they will fund it. This posting explores examples of an externality.

  • Socially Efficient Price and Quantity of the Good

    Illustrate the social welfare loss associated with this externality and identify it on a graph There is negative consumption externality of $20 of each unit of the good consumed, then the demand curve with externality should be the Marginal Social

  • Externalities - Positive and Negative

    160993 What type of externality (positive or negative) is described in each of the following examples? What type of externality (positive or negative) is described in each of the following examples?

  • externality and recent policies

    102681 externality and recent policies What is an externality? Give 3 examples and recent policies to resolve them. An externality is a spill over from an economic activity.

  • Consumer Surplus, Producer Surplus and Correcting for Spillover Costs or Externalities

    Show graphically how a tax can correct for a negative externality and how a subsidy to producers can correct for a positive externality. How does a subsidy to consumers differ from a subsidy to producers in correcting for a positive externality?

  • marginal benefit curves

    With, negative externality, MSC > MPC.But firms only consider MPC in choosing the output level and hence equilibrium occurs where MSB= MPC.This occurs to the right of efficient output,thus with negative externality there is overproduction.

View More Related Solutions