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)an unintended benefit or cost imposed on third parties as a result of economic activity.
E)an act, caused by a firm located in this country, which has an effect on a person in a foreign country.

Question

Quizplus · Accepted Answer

An externality is an unintended benefit or cost imposed on third parties as a result of economic activity. It can be either a positive or negative effect.

An Externality Is