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Negative and Positive Externalities

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What is the distinction between a negative and a positive externality, providing examples of each. The paper is also to address how such externalities can be promotes or discouraged. The proper role of the private sector and the government is also to be addressed. (APA Format).

What is the definition of an externality? What is the distinction between positive externalities (positive spillover costs) and negative externalities (negative spillover costs)? 250 words.

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Externalities defined with examples

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Negative externalities are costs of production or consumption of a good that are not reflected in the market price. In general, goods that cost more to produce have higher prices. In the case of a negative externality, the market is not able to correctly quantify the cost. It could be because the costs of production involve pollution of a common resource, such as a river. Because the producer does not own the river, he ...

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