The real world has problems with it. This means externalities come along with
those problems. Externalities can either be positive or negative, but for the sake
of this discussion post, I am going to focus on more of the negative externalities in
the world around us. Negative externalities are when the consumption or
production of a good can cause a negative effect on the third party— the one that
is being affected by it.
I think a great example of this would be loud music. I know in Tuscaloosa, there is
bound to be loud music especially on Thursday-Saturday night due to the amount
of partying going on in the college town. This loud music at night could affect your
next door neighbor or the people around you trying to get some rest. The person
playing the loud music is the one making the negative externality occur though it
is not causing them any trouble whatsoever. A negative externality put social cost
greater than private cost.
https://www.economicshelp.org/micro-economic-essays/marketfailure/negative-
externality/