An externality is
A) a cost or benefit resulting from some activity or transaction that is imposed or bestowed on parties outside the activity or transaction.
B) the total cost to society of producing an additional unit of a good or service.
C) the amount a consumer pays to consume an additional amount of a particular good.
D) a problem intrinsic to public goods: The good or service is so costly that its provision generally does not depend on whether or not any single person pays.

Question

Quizplus · Accepted Answer

An externality refers to a cost or benefit that affects a party who did not choose to incur that cost or benefit. This can happen in various scenarios, such as pollution from a factory affecting nearby residents.

An Externality Is