Q&A: What are the positive externalities the automobile industry ...
A positive externality is defined as anything that adds value to another industry, but that is provided without charge.
An obvious negative externality of the automobile industry is pollution. Pollution negatively affects people and other industries, yet the automobile industry does not pay this negative cost.
A positive externality would be less obvious, but possible examples could be:
- The automobile industry provides a high demand and useful purpose for fuel. This is a positive externality for energy companies. They gain without having to pay for the service rendered by the auto industry.
- If a specific car company opened a new headquarters in a city, the seat can bring business people, tourists, and others. It would be a positive externality for the city, which benefits from the presence of the company.
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