An Externality Occurs When

Multiple Choice

An externality occurs when:

A) ​people other than those making the demand and supply decisions share the benefits or the costs of an activity.
B) ​only the people making the demand and supply decisions share the benefits or the costs of an activity.
C) ​private costs of production equal the full social costs associated with production of a good.
D) ​private costs of production are ignored.