Which one below applies to an industry that produces a negative externality?

An industry that produces a negative externality is one where its activities impose costs on third parties who are not involved in the transaction. For example, a factory that emits pollution harms the health and environment of nearby residents, leading to increased healthcare costs and reduced quality of life. This negative impact is not reflected in the market price of the factory's products, resulting in overproduction and inefficiency. Effective regulation or taxation may be necessary to internalize these external costs.