An externality is:
A) always a benefit to the recipient.
B) always a detriment to the recipient.
C) an activity that occurs in a business which is unknown to management.
D) unintended benefits or costs imposed on third parties as a result of economic activity.

Question

Quizplus · Accepted Answer

An externality is an unintended benefit or cost imposed on third parties as a result of economic activity, which means it can be either a benefit or a detriment to the recipient. It is not an activity that occurs in a business which is unknown to management or always a benefit/detriment to the recipient.

An Externality Is