Which of the following is an example of a negative externality?

Air Pollution is the correct answer.

Explanation:

The cost suffered by a third party as a consequence of an economic transaction is called negative externality. The producer and consumers are called the first and second party, individuals, organisations and property owners or any resource that is indirectly affected are called third parties. Negative externalises are also called spillover effect or external cost. Externalities like waste arise from the consumption while the externalities like Carbon arise from the production.

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