An externality is a benefit or cost experienced by people who neither produce nor consume that product.

Name: An externality is a benefit or cost experienced by people who neither produce nor consume that product.
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Question

Quizplus · Accepted Answer

This is the definition of an externality in economics. It refers to the impact that a production or consumption activity has on those who are not directly involved in it. These effects can be positive (benefits) or negative (costs).

An Externality Is a Benefit or Cost Experienced by People