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Describe nature of cost imposed on third parties

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Non-pecuniary externalities can be described without any reference to prices. A corporation moving to a small town might cause traffic to worsen, increasing commute times. This is a non-pecuniary negative externality and may lead to a deadweight loss. That same corporation might cause rental rates to increase. This is a pecuniary externality and doesn't lead to a deadweight loss.

Identify a negative (non-pecuniary) externality and describe the nature of the cost imposed on third parties.

Identify a positive (non-pecuniary) externality and describe the nature of the benefit received by third parties.

Reference no: EM131368222

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