Economics

Study Notes

Negative Externalities

Level:
AS, A Level, IB
Board:
AQA, Edexcel, OCR, IB, Eduqas, WJEC

What are negative externalities?

Negative externalities occur when production and/or consumption impose external costs on third parties outside of the market for which no appropriate compensation is paid. This causes social costs to exceed private costs.

Negative externalities from production

Negative consumption externalities

Externalities - KEY DIAGRAMS revision video

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