In economics, "externalities" (or "negative externalities") are: a

Marketing Dec 27, 2020

In economics, "externalities" (or "negative externalities") are:

a. Activities of stakeholders that occur outside of the corporation proper

b. Activities directed at the market and not internally

c. Environmental costs paid by the corporation that produces such costs

d. None of the above

Expert Solution

d. None of the above

A negative externality occurs when the activities of a given firm impose an extra cost to the third parties such as the neighboring communities. Examples of such costs are maybe the emergence of diseases leading to increased cost of medication upon the third parties as a result of the emission of poisonous gases in the air by a given firm.

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