Society suffering due to the decision of a profit maximizing firm is a Macroeconomic Externality. It in termed as an externality because firm is not paying for the loss it is causing to the whole society just like when a steel firm does not pay for the water pollution it causes and create an externality for the fishery firm and in the case of steel firm, society does not have to bear its adverse affects if government imposes taxes on pollution. Likewise, if all the firms decide together to cut prices then only society is better off, but they fail. Although, price cut is in the interest of the society, firms fail and this failure is termed as Coordination Failure.
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