How to define the term "external costs"

There are many acceptable definitions of "external costs" but if you have the basic understanding of what it is then you should be fine. Firstly you know that it is a negative effect/impact by "costs" and from "external" you know that it is put onto a third party and can arise from high social costs. Therefore a suitable definition would be something along the lines of; External costs are the negative effects put onto a third party as a consequence of an economic activity.

FE
Answered by Fred E. Economics tutor

4259 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

Please explain what price elasticity of demand is, in the context of simple supply and demand of a good in a competitive market.


What is the difference between a perfectly competitive market and a monopoly market


Why are Monopolies able to profit maximise?


Explain, using examples, what is meant by the circular flow of income.


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning