An externality is
A) a benefit realised by the purchaser of a good or service.
B) a cost paid for by the producer of a good or service.
C) a benefit or cost experienced by someone who is not a producer or consumer of a good or service.
D) anything that is external or not relevant to the production of a good or service.

Question

Quizplus · Accepted Answer

An externality is a benefit or cost experienced by someone who is not a producer or consumer of a good or service. This means that the impact is outside of the market transaction between the buyer and seller, and may be positive or negative. For example, pollution from a factory may be a negative externality experienced by people living nearby, while the creation of a new park may be a positive externality enjoyed by the surrounding community.

An Externality Is