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Unformatted text preview: This forces the company to internalize the externality and help reduce the damage it is causing to society/environment Examples: pollution, traffic congestion , -for positive extranalities , the market is undersupplied - members of the community benefit by paying only thorough the tax system thus increasing the supply of the good and to make sure everyone is satisfied Examples: smell of a bakery, vaccine, golf course, museum, city parks-some externalaties are inframarginal.- the government should not intervene because the solution is too costly. Examples: someone using cell phone in class, occasional noise from a nearby park Private Property...
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- Spring '07