The purchase of coal by a utility is best described as a:
A) social cost.
B) private cost.
C) private benefit.
D) negative externality.

Question

Quizplus · Accepted Answer

The purchase of coal by a utility is a cost that is internalized by the utility company and is therefore a private cost. It is not a social cost or a negative externality, as these terms are typically used to describe costs that are imposed on society as a whole or on third parties outside of a transaction. It is also not a private benefit, as benefits are typically something that is gained by an individual or company, rather than a cost that is incurred.

The Purchase of Coal by a Utility Is Best Described