Question

Suppose a firm that produces for this market is able to dump toxic chemicals into a river next to its factory, which poisons wildlife and harms the health of nearby residents, who have no business with the company. This scenario is characterized by an externality _________, which is an example of market failure.

Answer 1

Answer:

an externality

Explanation:

Externality -

It is the cost or the benefit received by the third party , is known as externality .

The third party does not have any control over the creation of the cost or the benefit .

The externality can be negative as well as positive and can arise from the production or consumption of the services and goods .

hence , the correct term fro the given statement is an externality .