Externalities – OLIVIA ROWAN P.3!

Positive exteranlities are by-products of consumption or production that benefit third parties, who are not buyer or seller. Whereas, negative externalities are by-products of production or consumption that impose costs of third parties, neither buyers nor sellers.
The government intervenes, because they need to be able to regulate things. If the government did not step in and put an order to things, the people would buy and sell as they pleased, and that could start issues for the economy.

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