An externality can be a cost or benefit arising from the production of a good that falls upon
A) consumers but not producers.
B) producers but not consumers.
C) both the consumer and the producer.
D) someone other than the consumer or producer.

Question

Quizplus · Accepted Answer

An externality is a cost or benefit that affects a third party who did not choose to incur that cost or benefit, meaning it falls on someone other than the consumer or producer.

An Externality Can Be a Cost or Benefit Arising from the Production