Dioxin emission that results from the production of paper is a good example of a negative externality because.

Dioxin emission that results from the production of paper is a good example of a negative externality because self-interested paper producers will not consider the full cost of the dioxin pollution they create. (Option C)

A negative externality refers to a cost that is suffered by a third party as a result of the production or consumption of a product or service. The third party that are affected due to such transactions are independent of the situation (not consumer or producer) and are basically the bystanders. The most commonly cited examples of negative externalities are air and noise pollution. Negative externalities commonly impact public resources as it is challenging to hold parties accountable for example in cases of environmental pollution. Producers or consumers may generate a negative externality without concern about lawsuits or fines.

Note: The question is incomplete as the options are missing. The options are a. self-interested paper firms are generally unaware of environmental regulations. b. there are fines for producing too much dioxin. c. self-interested paper producers will not consider the full cost of the dioxin pollution they create. d. toxic emissions are the best example of an externality.

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