Question

analysis on what is the issues are in externalitieswithin car industry.

list of the externalities on car industry

why is the externalities and why is no working?

what is the solution and what is the recommendation to resolve the problem
provide data sources

Answer 1

A production externality is one in which people outside the perview of the production process get affected directly/indirectly.

In the car manufactuting industry, the car plants can have the following externalities:

1) Smoke/residue from the production process being dumped in the water bodies causing negative health effect to people.

2) Car produced cause pollution creating a negative externality of environmental damage.

3) Manufacturing plant using excessive electricity and water resources causing negative externality to other people in terms of lower resource availablity.

There can be more such examples.

One of the ways to take care of the problem of externality is to make firms internalize the cost of causing it.

Another way can be a tax(on pollution etc).

Assigning property rights like the right to pollute to people or the polliter can also help take care of the externality as stated in The Coarse Theorem.