Answer:
An externality is said to occur when the action of one entity made an impact on other entity. These externalities can be positive as well as negative. A positive externality occurs when the action of one person positively affects the other. For instance, plantation by a person provides fresh air to others. Also, it contributes to the environment along with increasing the welfare of people. Thus, plantation by a person affects the life of the people living on the surrounding areas, it enhances the overall welfare of the society and creates positive externality.
You need to login to perform this action.
You will be redirected in
3 sec