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padilas [110]
3 years ago
10

Dioxin emission that results from the production of paper is a good example of a negative externality because:

Business
1 answer:
yKpoI14uk [10]3 years ago
4 0

Answer:

Option (c) is correct.

Explanation:

There are two types of externality are as follows:

(a) Positive externality

(b) Negative externality

Negative externality occurs when a third person is affected by the engagement of two parties. It means that there is a reduction in the consumption function of the third person from the production of goods by the other parties.

In our case, a firm which produces paper and from this production of paper there is an emission of Dioxin which affect the consumption of nearest persons or firms.

Therefore, a paper producing firm have to consider all the externality while calculating the total cost.

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