External costs
What External costs means in Economics B A-Level, as defined for Pearson Edexcel.
Definitions of External costs
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Reference: Pearson Edexcel
Negative third-party effects that are ignored by buyers and sellers and not reflected in the market price.
Negative side-effects imposed on third parties, like pollution affecting health.
The negative spillover effects on third parties not involved in the transaction.
Topics that use External costs
- Externalities (Pearson Edexcel A-Level)
- Market failure and externalities (Pearson Edexcel A-Level)
Related terms
- External benefits
- Market failure
- Social costs
- Externalities
- Government intervention
- Private benefits
- Resource allocation
- Resource misallocation
Using External costs in the exam
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