Externalities measure
A)Only costs of a market activity borne by a third party.
B)Only benefits of a market activity borne by a third party.
C)Either costs or benefits of a market activity borne by a third party.
D)None of the choices are correct.

Question

Quizplus · Accepted Answer

Externalities refer to the costs or benefits of a market activity that are borne by a third party who is not involved in the activity. Therefore, option C is correct as it includes both costs and benefits as possible externalities.

Externalities Measure