In the analysis of externalities and market failure, a third party is
A) the party a contractual agreement is meant to benefit
B) a person, or persons, who is unintentionally affected by the actions of others
C) the third person in a three-way contract
D) the person who owns the property right in a contract
E) the government attempting to mediate a dispute between the two other parties

Question

Quizplus · Accepted Answer

A third party in the context of externalities and market failure refers to individuals or groups who are unintentionally affected by the actions of others, without being a direct party to the action or transaction.

In the Analysis of Externalities and Market Failure, a Third