If the social cost of an activity equals the private cost, what kind of externality exists?
A) an external cost
B) an external benefit
C) There is no externality.
D) This cannot be determined by the information given.

Question

Quizplus · Accepted Answer

When the social cost of an activity is equal to the private cost, it means that all costs associated with the activity are borne by the producer or consumer of the good or service, and no external costs or benefits are present. Therefore, there is no externality.

If the Social Cost of an Activity Equals the Private