Thread: Externalities
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Old Oct 29, 2003, 07:23 am   #8 (permalink) (top)
Geoff332
Igneous Magma
 
Location: New Zealand
Posts: 309
Oh, 'take into account' in economics is very specific. In a perfect market, all information necessary to make a decision about the transaction is contained within the price of the product. Externalities occur when there are economic effects that are not reflected in the price -- a negative externality is usually a cost of production that is not incurred by the producer.
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