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3.8.1 Positive and negative externalities
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What is an externality?

What is an externality?

Diagram comparing positive and negative externalities, showing social benefit greater than private benefit and social cost greater than private cost.

An externality is a cost or benefit of an economic activity that falls on a third party rather than on the buyer or seller. A third party is someone affected by the transaction who neither bought nor sold and had no say in it.

3.8.1 Positive and negative externalities Lesson

  1. GCSE
  2. /Economics
  3. /3.8.1 Positive and negative externalities

Step-by-step lessons on OCR GCSE Economics 3.8.1 Positive and negative externalities. Each one builds up to exam-style questions. Build a solid grasp of supply and demand and cost/revenue calculations before tackling the evaluation-heavy policy topics.

Lessons