A "negative externality" is a cost that is suffered by a third party as a result of an economic transaction. For example, if one person sells radioactive cars and the other person buys them, it's not enough to say that it's fine, because they both agreed to the transaction. Radioactive pollution will affect even people who did not participate in the transaction.
Government is often expected to deal with negative externalities, eg. by imposing regulations on what and how firms can produce. However these regulations often lead to higher costs and curtail freedom of entrepreneurs to do whatever they see profitable.
Explain how weakening EPA's (Environmental Protention Agency) regulations could be seen as supply-side policy.
