When the cost of producing a product is paid, at least in part, by someone other than the producer, the cost is referred to as
A) an external/internal cost.
B) an external benefit.
C) an external cost.
D) an external profit.
E) a public cost.

Question

Quizplus · Accepted Answer

When a cost is paid, at least in part, by someone other than the producer, it is referred to as an external cost. This is also known as a negative externality, where the cost of producing a good or service is imposed on a third party who is not involved in the transaction. Examples of external costs include pollution from manufacturing processes or noise pollution from a construction site.

When the Cost of Producing a Product Is Paid, at Least