Externalities are best described as:

CA Foundation · Business Economics · MTP · May 2026
Externalities are best described as:
(A) A. Effects of economic activity on third parties
(B) B. Internal costs of production
(C) C. Government expenditures
(D) D. Market equilibrium conditions

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Internal costs of production

Topics: Public Finance

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