An externality is a cost or benefit arising from an economic activity that falls on
A)consumers but not producers.
B)producers but not consumers.
C)consumers or producers.
D)someone other than consumers or producers.
E)foreigners.

Question

Quizplus · Accepted Answer

An externality is a cost or benefit that affects someone other than the consumers or producers engaged in the activity. For example, pollution from a factory affects the environment and possibly nearby residents who did not choose to engage in the economic activity.

An Externality Is a Cost or Benefit Arising from an Economic