Externalities are third party consequence of some other action. They can be positive or negative externalities and they impose a benefit or cost to a third party. Identify a positive and a negative externality. Discuss the benefits and costs associated with each type of externality. What happens to the supply and or demand curve in each of your example?

Question

Externalities are third party consequence of some other action.  They can be positive or negative externalities and they impose a benefit or cost to a third party.  Identify a positive and a negative externality.  Discuss the benefits and costs associated with each type of externality. What happens to the supply and or demand curve in each of your example?