Answer:
B. Negative externality
Explanation:
An externality is defined as a benefit or a loss that occurs to a third party due to some external reasons. The party has no control over the creation of the benefit or loss. It can be both negative or positive. Negative externality is a loss caused to the party whereas positive externality is a benefit caused to the party.
Here, the river is being polluted due to paper manufacturing industry. It means that the river is incurring a loss due to an external factor. Hence, this situation would be considered as negative externality.
