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The existence of external benefit and external cost leads to misallocation of resources. External cost For example, when drivers are not liable for the health damage of car exhaust, drivers will equate only marginal private cost with marginal benefit. But if drivers are forced to pay for the health damage of car exhaust, their marginal cost will go up by the amount of the external cost.
Indirect costs can be fixed or variable costs. Often, they are fixed costs -- an example being the rent you pay on your building. Sometimes, they are variable. An example of a variable cost use your electricity or water bill, which can change monthly.