About Doctor
Q: What is a positive externality?A: A positive externality is a benefit that is enjoyed by a third party who is not directly involved in the production or consumption of a good or service.
Examples:
- When someone gets vaccinated, they not only protect themselves from disease, but they also protect others who are not vaccinated from getting sick.
- When someone builds a new house, they increase the value of the homes in the surrounding area.
- When a company invests in research and development, it creates new knowledge that can benefit society as a whole.
