When the benefits of producing a good or service spill over to other people,rather than just the buyer,the spillover is referred to as
A) an external benefit.
B) an external cost.
C) a marginal cost.
D) an equilibrium social output.
E) a Coasian good.

Question

Quizplus · Accepted Answer

An external benefit occurs when the production or consumption of a good or service results in a positive impact on a third party who is not involved in the transaction. This is also referred to as a positive externality because the benefits "spill over" to others beyond the direct consumer or producer.

When the Benefits of Producing a Good or Service Spill