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    Externalities effecting management

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    a. What is an externality?
    b. Why might externalities lead a firm to discharge too much pollution into a river?
    c. 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 its workplace?

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    Solution Preview

    a) An externality is a force that comes from outside the organization.
    b) An externality like ...

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    This solution discusses externalities affecting management.

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