Factories produces goods that we consume and export, but they are also responsib

Question

Factories produces goods that we consume and export, but they are also responsible for the polluting the environment. Based on your understanding chapter 4, what type of externality  pollution creates and what are recommendation for controlling pollution.

Factories produces goods that we consume and export, but they are also responsible for the polluting the environment. Based on your understanding chapter 4, what type of externality  pollution creates and what are recommendation for controlling pollution.

Explanation / Answer

A pollution creates negative externality because the third party (society)is harmed by affects of pollution.It can be controlled by taxing the polluter,putting a ceiling on the level of pollution,defing clear ownership right of the environment.

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