What is the definition of an externality? What is the distinction between positive externalities (positive spillover costs) and negative externalities (negative spillover costs)? Why do externalities exist?© BrainMass Inc. brainmass.com March 21, 2019, 6:53 pm ad1c9bdddf
Externalities are costs that are not captured in market prices. Postitive externalities are those that would make a price lower than it should be. For example, the benefits of a highly education population make society better for everyone, ...
A discussion on types of externalities and the reasons for their existences are examined.