The term____ refers to a market exchange that affects a third party who is outside or external to the exchange
Business · High School · Tue Nov 03 2020
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The term you are referring to is "externality." An externality occurs when the production or consumption of a good or service affects a third party that is not directly involved in the market exchange. Externalities can be either positive or negative and often have consequences for individuals or society that are not reflected in the market prices. They are considered market failures because the true costs or benefits associated with the production or consumption of a good are not fully accounted for in the market transactions.