Costs of production borne not by the enterprise that causes them but by society are called:
A) internal diseconomies.
B) internal economies.
C) benefits.
D) externalities.

Question

Quizplus · Accepted Answer

Externalities are costs or benefits that are not reflected in the market price of a good or service, but are instead borne by society as a whole. In this case, the costs of production are borne not by the enterprise that causes them but by society, making it an externality. Internal diseconomies and internal economies refer to costs or benefits arising from within the enterprise itself, whereas benefits alone do not necessarily imply any costs being borne by society as a whole.

Costs of Production Borne Not by the Enterprise That Causes