What is an externality? A. The highest valued alternative that must be given up to engage in an activity. B. The ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than other producers. C. A fixed or variable cost incurred by firms to produce a good or service. D. A benefit or cost that affects someone who is not directly involved in the production or consumption of a good or service. E. The combined benefit and cost to those directly involved in production and consumption of a good or service.

Question

Business

Raquel Garcia

11 February, 10:31

What is an externality? A. The highest valued alternative that must be given up to engage in an activity. B. The ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than other producers. C. A fixed or variable cost incurred by firms to produce a good or service. D. A benefit or cost that affects someone who is not directly involved in the production or consumption of a good or service. E. The combined benefit and cost to those directly involved in production and consumption of a good or service.

+5

Answers (1)

Know the Answer?

Hodges · Answer 1

An externality is a side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in the cost of the goods or services involved.

So I would say E.