An Externality Is

question 43

Multiple Choice

An externality is

• A)a cost of a transaction that is borne by a third party
• B)a benefit of a transaction that is enjoyed by a third party
• C)a cost or benefit that arises when market price changes
• D)any cost or benefit of a transaction that is not accounted for in the market price
• E)the external revenue generated by a firm

---

Definitions:

Demand Requirements

The specific quantities of products or services that a market or customer base needs over a particular period.

Pure Level Strategy

A production strategy where the output levels are kept constant despite fluctuating demand, aiming at minimizing changes in production rates.

Supply

The total amount of goods or services available for purchase in a market, or the provision of necessary resources.