Ch 10 Externalities Property Rights External cost a cost of an activity that falls on people other than those who pursue the activity also called a negative externality ex when people text and drive puts you in harms way living near a hospital lots of noise and traffic Smoking horrible for you and the people around you Externality an external cost or external benefit of an activity Negative Externality Positive externality External Benefit a benefit of an activity received by people other than those who pursue the activity your neighbor plants beautiful flowers you can enjoy looking at them and the also called a positive externality smell of them good wifi signal Demand curve marginal benefit Supply curve marginal cost You maximize profit when MC MR or MC MB
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