Externalities affect the welfare of others not involved in the production or consumption of a good or service in ways that markets don't take into account.

Name: Externalities affect the welfare of others not involved in the production or consumption of a good or service in ways that markets don't take into account.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Externalities are costs or benefits that affect third parties who are not directly involved in the economic transaction, and these effects are not reflected in market prices.

Externalities Affect the Welfare of Others Not Involved in the Production