If a coal-powered electrical generator discharges smoke into the air and causes uncompensated costs and discomfort to residents of a town, then this electrical generation has a(n):

Question

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The scenario described represents external costs, which occur when the production or consumption of a good or service imposes uncompensated costs on others who are not involved in the transaction. In this case, the residents of the town are affected by the smoke discharged by the electrical generator, causing discomfort and uncompensated costs.

If a Coal-Powered Electrical Generator Discharges Smoke into the Air