Pollutions and External Costs Case Study Example | Topics and Well Written Essays - 2000 words

Pollutions and External Costs - Case Study Example The externality can be considered as one of the most important concepts which can be perceived on the basis of different aspects. The externality can refer to the cost of the factors that can affect business transactions mainly the group that used the factor to be able to be related to a group. Thus, the externalities then can be perceived in cases wherein the group being supplied gains profit (Gibson, 1996). Due to the fact that every factor and component of the environment even the economic aspect can be considered to have a price. For that matter, the sale of the products being produced can be of great effect to the supplier company, although it can be considered as an indirect effect. In the study of the effects of externality, it is important to determine that the effects of the said concept can either be positive or negative (Gibson, 1996; Hussen, 2000). A negative externality can be perceived when the side of the production or consumption of a particular product. One of the most significant examples of a negative externality in consumption is pollution. In such case then, externalities can be considered as an effect of the failure of the 3rd group. On the other hand, externality can also be positive wherein indirect actions in the society can improve the chance for good transactions. An example is the development of different types of remedies and medication (Gibson, 1996; Hussen, 2000). The presence of externalities can be questioned in terms of efficiency. This can be attributed to the fact that a system targets the efficient use of every part and every material. Due to the fact that externalities are based on the indirect effects of different factor, a sign of being weak, the study of the implications of externalities is a vital issue (Gibson, 1996; Hussen, 2000).