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An externality is
a. a benefit realized by the purchaser of a good or service.
b. a cost paid for by the producer of a good or service.
c. a benefit or cost experienced by someone who is not a producer or consumer of a good or service.
d. anything that is external or not relevant to the production of a good or service.

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Answer:

The answer is "C", a benefit or cost experienced by someone who is not a producer or consumer of a good or service.

An externality affects to a third party that didn't choose to incur on it. It usually happens when the negative or positive externality impacts a third party that is not directly related to either the production nor the consumption process of a service or good.

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