Costs caused by the firm but are incurred and paid for by parties outside the firm are called:

Question

Quizplus · Accepted Answer

Unrealized external failure costs are costs that are caused by the firm but are incurred and paid for by parties outside the firm. These costs include expenses related to product recalls, warranty repairs, liability claims, and fines or penalties from regulatory bodies. The firm may not immediately realize the financial impact of these costs, but they can ultimately affect the firm's bottom line through reputation damage, loss of customers, and legal expenses.

Costs Caused by the Firm but Are Incurred and Paid