Externalities under traditional economic conditions

Economic externalities are the non-market impacts caused by the economic activities of economic entities (including manufacturers or individuals) on others and society. Divided into positive externalities and negative externalities. Positive externality means that the activity of an individual economic behavior benefits others or society, and the beneficiaries do not have to pay any cost; negative externality means that the activity of an individual economic behavior causes damage to others or society, but the people who cause external diseconomy do not have to pay any cost. There is no cost incurred for this.

Economic externalities have the following characteristics: Externalities are a man-made activity. The impact caused by non-man-made events, whether it brings losses or gains to human beings, cannot be regarded as externalities. ; Externality should be an impact derived beyond the main purpose of an activity; Externality is a non-market connection (or impact) between different economic individuals, which is often not the result of voluntary negotiation between the parties concerned, or It is a result produced by non-unanimous consent; externalities can be positive, negative or zero; externalities include the impact on all living and non-living things related to the ecological environment and social welfare.