A negative externality exists when the actions of one party impose costs on a second party.

Name: A negative externality exists when the actions of one party impose costs on a second party.
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A negative externality occurs when the production or consumption of a good or service imposes costs on third parties who are not involved in the transaction, leading to a situation where the social cost exceeds the private cost.

A Negative Externality Exists When the Actions of One Party