Missing Market for a Quiet Environment
An example of a missing market occurs when an entity, such as an airport or a factory, generates noise that negatively affects a nearby residential community. Because there is no formal market where the community can sell its 'right to a quiet environment,' the producer of the noise does not have to pay for this resource. Consequently, quiet is treated as a free input, leading to an excessive level of noise pollution, which is a negative externality.
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