Question: Did the profit motive of these firms result in any externality?
Answer: Yes. The profit motive of J K Cements has resulted in various externalities over
period of time. Interestingly, this includes negative and positive externalities. Those
externalities are listed below.
1) One of the main negative externalities caused by J K Cements is pollution. The main
form of pollution is air pollution which is caused by the manufacturing process. This
is followed by noise pollution and land pollution.
2) Greenhouse gases emission is another negative externality caused by the cement
manufacturing. This is because of the carbon dioxide produced when calcium
carbonate is heated.
3) In order to promote their business and establish the brand name, they have done a lot
of social activities including building schools, colleges, training institutes,
transportation infrastructure and other social infrastructure. This can be considered as
a positive externality.
4) J.K. Cement Limited has remained socially responsible and is willingly undertaken
various Corporate Social Responsibility initiatives even when there have been no
legal and statutory requirements. This also can be explained as an example of positive
externality.
Question: List out the effect of externality on society and how did these firms internalize it.
Answer: From the externalities listed above, positive and negative externalities have
varied effects on society, people, land and environment. The first two externalities which
are negative externalities have a harmful impact on the environment. The pollutions
caused by the manufacturing processes are leading the health of whole world and its
population to a worse situation. Air pollution makes the life difficult for a good percentage
of population especially for people with breathing difficulties such as asthma. This can
also lead to lung disorders. Noise pollution also causes difficulties for a lot of people.
Land pollution affects almost all the living organisms including plants and animals in one
or the other way.
The third and fourth externalities which are positive externalities are actually a supporting
hand for the people and society. These initiatives help to make positive changes in the
society. New schools and training institutes will help to mould the future of younger
generation and transportation infrastructure helps in making the daily lives of the people
easier.
Question: Did the profit motive of these firms result in any externality?
Answer: Yes. Dabur India is one of the most famous brands in India which highlights the fact
that Dabur has caused various externalities in the society. Similar to J K Cements, Dabur
India also causes positive and negative externality. The externalities caused by the company
are listed below.
1) Discharges of ozone-depleting substances like carbon dioxide, and different other
hurtful like sulphides and smelling salts while delivering and pressing items in huge
scope. Also, the outflow of such gases prompts a fast expansion in an unnatural
weather change prompting medical problems for humans. This can be regarded as a
negative externality.
2) The aim of profit maximization leads Dabur to supply low quality products often.
This can be taken as an example of negative externality as better quality substitutes
are available in the market for Dabur products.
3)