A marginal external cost of a product is equal to
A) the cost someone other than the producer incurs when another unit is produced.
B) what the producer has to pay to hire resources to produce another unit.
C) what the consumer must pay when he or she buys the good or service.
D) the cost the producer incurs to produce another unit.
E) None of these answers describes a marginal external cost.

Question

Quizplus · Accepted Answer

A marginal external cost is a cost incurred by someone other than the producer, such as society as a whole or individuals who are indirectly affected by the production of a good or service. It is not a cost incurred by the producer or the consumer directly.

A Marginal External Cost of a Product Is Equal to