If an increase in output by a firm imposes uncompensated costs on other firms, these costs are referred to as

Question

Quizplus · Accepted Answer

External diseconomies of production occur when a firm's increase in output leads to an increase in costs for other firms, without these costs being compensated. This typically happens when the production activities of one firm negatively affect the production capabilities or costs of another firm, without any financial compensation for the affected parties.

If an Increase in Output by a Firm Imposes Uncompensated