The costs that firms create but taxpayers and individuals end up liable for are called ______________.

Question

Quizplus · Accepted Answer

Externalities are costs or benefits created by a firm's production or consumption activities that are not reflected in the market price. When these costs are incurred by the taxpayers or individuals who are not involved in the transaction, they are called negative externalities. Examples include pollution or traffic congestion.

The Costs That Firms Create but Taxpayers and Individuals End