Consider a factory, located in the middle of nowhere, producing a nasty smell. As long as no one is around to experience the unpleasant odor, what type of externality is produced

Since no one is affected, it means that there is simply no externality.

Explanation:

Externality occurs when the actions of an individual has an effect on someone else that's not part of the action. It can either be a positive externality that is when theres a positive effect on the third party or it could be a negative effect that's when there is a negative effect on the third party.

In this scenario, despite the fact that the factory is making the nasty smell, as long as no one is around to experience the unpleasant odor, then it mean that there is no externality. Fir an externality to occur, someone has to be affected.

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