Air pollution generated by a paper mill factory is an example of
A)a positive production externality.
B)a positive consumption externality.
C)a negative consumption externality.
D)diminishing returns.
E)a negative production externality.

Question

Quizplus · Accepted Answer

A negative production externality occurs when a producer's actions have a negative impact on the environment or society, such as air or water pollution. In this case, the paper mill factory is producing air pollution, which is a negative externality imposed on the surrounding community.

Air Pollution Generated by a Paper Mill Factory Is an Example