Externalities
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Goods can be classified based on whether consumption is rival or nonrival and whether people can be excluded from consumption. Rival goods have limited availability while nonrival goods can be consumed by many without reducing supply. Excludable goods can limit users to those who pay while nonexcludable goods are available even without payment. Some economic activities create external costs or benefits for third parties not involved in the production or consumption through pollution, landscaping effects, and other impacts, with potential issues of free riding.
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