Externalities are costs that an entity imposes on others as a result of its operations, but which the entity typically ignores

Question

Quizplus · Accepted Answer

Externalities are costs that are not borne by the entity causing them, but by others. These costs can be negative, such as pollution, or positive, such as the benefits of a vaccination program. The entity causing the externalities may not take them into account when making economic decisions, leading to market failures and inefficiencies.

Externalities Are Costs That an Entity Imposes on Others as a Result