Positive externalities in Production When an externality benefits the bystanders, a positive externality exists. The social costs of production are less than the private cost to producers and consumers。 H arc Inc items and derived items copyright o 2001 by Harcourt, IncHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Positive Externalities in Production When an externality benefits the bystanders, a positive externality exists. uThe social costs of production are less than the private cost to producers and consumers