An Externality Is a Cost or Benefit Created by a Transaction

question 23

Multiple Choice

An externality is a cost or benefit created by a transaction that

• A) is outside the firm's ability to control.
• B) is a result of regulatory market failure.
• C) reduces antitrust concerns.
• D) substitutes most-favored-customer prices for cost-plus markups.
• E) is not paid for or enjoyed by those involved directly in the transaction.

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