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An externality occurs whenever the actions ofone party make another party worse or better off, yet the first party neitherbears the costs nor receives the benefits of doing so.If one of the parties, which support actions cause adverse effects to the other person by the impact it may cause another to perform better or worse. We call the impact that the impact from the outside. The impact from the outside, it has both positive and negative aspects. The purpose of this report is ditkhat to negative external effects on the system sotkit sasen.A negative externality occurs when an individual or firm making a decision does not have to pay the full cost of the decision. If a good has a negative externality, then the cost to society is greater than the cost consumer is paying for it. Since consumers make a decision based on where their marginal cost equals their marginal benefit, and since they don't take into account the cost of the negative externality, negative externalities result in market inefficiencies unless proper action is taken.
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