An externality is either an external cost or external benefit that spills over to bystanders.

Name: An externality is either an external cost or external benefit that spills over to bystanders.
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Question

Quizplus · Accepted Answer

This statement accurately defines what an externality is. It refers to costs or benefits that affect individuals or groups who are not directly involved in a transaction or activity. These third parties can be affected positively or negatively due to the actions of others, creating externalities.

An Externality Is Either an External Cost or External Benefit