No externalities exist when:
A) private costs exceed social costs.
B) private costs and benefits equal social costs and benefits.
C) private benefits are less than social benefits.
D) private benefits exceed social benefits.

Question

Quizplus · Accepted Answer

When private costs and benefits are equal to social costs and benefits, there are no externalities because all costs and benefits are accounted for and there is no spillover effect on third parties.

No Externalities Exist When