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Positive externality | Definition, Examples, Internalizing . . . Positive externality, in economics, a benefit received or transferred to a party as an indirect effect of the transactions of another party Positive externalities arise when one party, such as a business, makes another party better off but does not receive any compensation for doing so
Positive Externalities - Economics Help Definition of Positive Externality: This occurs when the consumption or production of a good causes a benefit to a third party For example: When you consume education you get a private benefit But there are also benefits to the rest of society
10 Positive Externality Examples (2025) - Helpful Professor A positive externality (also called “external benefit” or “beneficial externality”) is anything that results from an economic activity and causes a benefit to an uninvolved third party for which the producer of that externality is not compensated (Varian, 2019)
Positive Externalities Explained - Intelligent Economist Whether positive or negative, externalities are the effects of a good’s consumption or production on third parties; these effects are not accounted for in the price of said goods Externalities are otherwise known as “spill-over effects ”
Positive externalities (video) | Khan Academy Explore the concept of positive externalities through a hypothetical market for a certain type of tree You'll see how the increasing the quantity of trees impacts marginal cost curve for supply, as the price increases with each additional tree
5. 1 Externalities – Principles of Microeconomics In the presence of a positive externality (with a constant marginal external benefit), this curve lies above the demand curve at all quantities When we add external costs to private costs, we create a marginal social cost curve