A negative externality or spillover cost occurs when Multiple Choice the price of a good exceeds the marginal cost of producing it. firms fail to achieve allocative efficiency. firms fail to achieve productive efficiency. the total cost of producing a good exceeds the costs borne by the producer.
A negative externality or spillover cost occurs when the total cost of producing a good exceeds the costs borne by the producer.
Spillover costs, commonly referred to as "negative externalities," are losses or harm that a market transaction results in for a third party. Even though they were not involved in making the initial decision, the third party ultimately pays for the transaction in some way, according to Fundamental Finance.
An incident in one country can have a knock-on effect on the economy of another, frequently one that is more dependent on it, known as the spillover effect.
Externalities are the names for these advantages and costs of spillover. When a cost spills over, it has a negative externality. When a benefit multiplies, a positive externality happens. Therefore, externalities happen when a transaction's costs or benefits are shared by parties other than the producer or the consumer.
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