A power plant in Illinois produces electricity by burning coal.This results in acid rain that kills trees and wildlife in New York.This is an example of

Question

Quizplus · Accepted Answer

This scenario represents the concept of external cost, which is a cost resulting from a transaction that is not borne by the parties directly involved in the transaction. In this case, the power plant is not paying for the damage caused by the acid rain, and the costs are being externalized onto the environment and the people impacted by it.

A Power Plant in Illinois Produces Electricity by Burning Coal