Sometimes, when goods are produced and consumed, side effects are felt by people who are not directly involved in the market exchanges. In general, these side effects are called
A)Coase effects.
B)externalities.
C)public goods.
D)internalities.
E)none of the above

Question

Quizplus · Accepted Answer

Externalities refer to the side effects or consequences of commercial activities that affect other parties without this being reflected in market prices. These can be either positive or negative and occur when the production or consumption of goods and services imposes costs or benefits on third parties not involved in the transaction.

Sometimes, When Goods Are Produced and Consumed, Side Effects Are