This is the most common type of externality, and the one that will be addressed most frequently in this course, and in real life. It can take many guises. For example, think about a case where a village makes its living from catching and selling fish from a river. Now, if a chemical plant open 25 miles up river, and decides to discharge chemical waste into the river, then the fish all die and the people in the village lose their ability to make a living. In this case, the chemical plant (and, by extension, its customers) is not being forced to cover all of the costs of its operation. If it was required to dispose of hazardous waste in some way that did not involve dumping it into a river, then it would be faced with higher costs, and if it has higher costs, then the price of its products will be higher. If the price is higher, then consumers will purchase less.