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You toss a newly purchased felt mouse across the floor; your cat chases it excitedly,clutches it in her paws,and rolls around with it.Several tosses later,your cat yawns pointedly and settles herself for a nap.The change in your cat's behavior illustrates:
External Cost
Costs of a transaction that affect people other than the buyer or seller, often not included in the price of goods or services.
Efficient Amount
The level of production or quantity of a good that optimizes the use of resources to achieve the highest possible satisfaction or benefits.
Unregulated Amount
A quantity or volume not controlled or limited by laws or administrative rules, often relating to production or trade.
Marginal Social Cost
The total cost society bears for the production of an additional unit of a good or service, including both private costs incurred by firms and external costs to others.
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