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Efficient quantity - PowerPoint PPT Presentation

Externalities

Externalities. An externality is a cost or benefit resulting from some activity or transaction that is imposed or bestowed upon parties outside the activity or transaction. Sometimes called spillovers or neighborhood effects. Externalities.

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Finding the Efficient Quantity

Finding the Efficient Quantity. $/unit. Demand. Supply. $18. $12. $6. 0. 10. 20. 30. Number of Units. Characteristics of Goods. Rival A unit of the good cannot be consumed by more than one person at one time. Excludable

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Efficient quantity - PowerPoint PPT Presentation

Externalities

Finding the Efficient Quantity