In a situation where an externality occurs, the "third party" refers to those who
A) buy the product from others.
B) produce the product for others.
C) trade the product with others outside the nation or community.
D) are not directly involved in the transaction or activity.

Question

Quizplus · Accepted Answer

The third party refers to those who are not directly involved in the transaction or activity but are affected by its outcome. They could be individuals, organizations or the environment. For example, pollution caused by a factory would affect the health and well-being of people living nearby who are not involved in the production process, making them third parties.

In a Situation Where an Externality Occurs, the "Third Party