An externality can be a
A) benefit but not a cost.
B) cost but not a benefit.
C) marginal cost but not a total cost.
D) cost or a benefit.

Question

Quizplus · Accepted Answer

Externalities can be either costs or benefits that affect a party who did not choose to incur that cost or benefit. For example, pollution from a factory can impose costs on nearby residents (negative externality), while a well-maintained garden can benefit neighbors (positive externality).

An Externality Can Be a