An external cost is
A) The cost of a warehouse
B) A cost of production in some other market
C) The economic harm that a positive externality imposes on others
D) The economic harm that a negative externality imposes on others

Question

Quizplus · Accepted Answer

An external cost is a cost that is not accounted for in the market price of a good or service and is instead borne by society as a whole. This includes the economic harm that a negative externality imposes on others, such as pollution or congestion. Choices A and B refer to internal costs related to production and logistics, while Choice C refers to the economic benefit of a positive externality.

An External Cost Is