Question

When consumption or production of a product has a harmful side effect that is borne by people not directly involved in the market exchange for that product, the side effect is called a(n):

Answer 1

An external cost.

Step-by-step explanation:

An external cost is the cost borne upon by a third party, maybe an individual, firm or community as a result of a market exchange for a product which they are not directly involved in. And this can occur in both production and consumption.