External benefits are the extra
A) benefits a consumer gets from consuming a good.
B) costs a producer creates in producing a good.
C) benefits that accrue to people other than the consumers.
D) costs a producer bears for producing a polluting good.
E) benefits a producer obtains for reducing production of a polluting good.

Question

Quizplus · Accepted Answer

External benefits are positive effects that spill over to third parties who are not directly consuming the good or service. These benefits are not reflected in the market price of the good, and so consumers and producers do not take them into account in their decision-making. Examples of external benefits include pollination services provided by bees to nearby farms, technology spillovers that benefit other firms, and education that leads to a more informed citizenry.

External Benefits Are the Extra