An externality is:
A) always a benefit to the recipient.
B) always a detriment to the recipient.
C) an activity that occurs in a business which is unknown to management.
D) an unintended benefit or cost imposed on third parties as a result of economic activity.

Question

Quizplus · Accepted Answer

An externality is an unintended benefit or cost imposed on third parties as a result of economic activity. It can be either a positive or negative impact and is not necessarily beneficial or detrimental to the recipient.

An Externality Is