Externalities more help

Another example : A Bee Keeper keeps bees.  He buys bees from a bee seller from a price.  Supply and demand factors determine that price.

However the market for bees does not take into account a third party.  Down the road there is a farmer who benefits from the bees pollinating his crops.  There is an external benefit to someone other than the bee-keeper.  This is a positive externality.  The market has not taken into account these third-party benefits and does not supply enough of these bees.  Society wants more bees. The market has failed.

Mr Franchini had a go, I've had a go.  If you still do not understand Externalities, you might need some help from Paj.

Paj Holden on Negative Externalities and on Positive Externalities