Externalities are usually unintended consequences of certain economic activities. In the case of negative externality, the costs do not lie with the originator (producer), but other subjects. Market players in term of market forces are not motivated to eliminate externalities (if the regulation by the state is not properly set).
From the perspective of economics, the externalities are typical example of market failure.
Examples of externalities are e.g. emission from industrial enterprises and car traffic. Another example is the polluted water from industrial and household operations.
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