Pollution emitted by a factory that muddies the surrounding environment and affects the health of nearby residents is a negative externality

Marketing Dec 26, 2020

Pollution emitted by a factory that muddies the surrounding environment and affects the health of nearby residents is a negative externality. The effect of a well-educated labor force on the productivity of a company is an example of a positive externality.

True or False? Explain.

Expert Solution

This statement is false

The effect of labor force would directly impact the productivity of the company. In this case, neither the company nor the labor force is the third party. But this is true that pollution emitted by the factor would negatively externalize society.

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