The dumping of chemicals into a lake,which contaminates the drinking water,is an example of:

Question

Quizplus · Accepted Answer

This is an example of an externality where the production or consumption of a good (chemicals) has a negative impact on a third party (people who depend on the lake water for drinking). The costs of this contamination are not borne by the producers of the chemicals, but by the affected individuals and society as a whole.

The Dumping of Chemicals into a Lake,which Contaminates the Drinking