Concept
Version 8
Created by Boundless
Negative Externalities
Negative Externality
Graphically, negative externalities occur when social costs are lower than private costs, and firms produce more units than is socially optimal. The ideal equilibrium quantity that reflects negative externalities is Qs, but firms may produce at Qp.
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"Negative externality."
http://en.wikipedia.org/wiki/File:Negative_externality.svg
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