Nunavut (NU) | Ontario (ON) | Prince Edward Island (PEI) | Quebec (QC) | Saskatchewan (SK) | Yukon (YK) |
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.
An indirect cost is assigned to a cost object by using a reasonable and convenient method. Variable cost One that increases in total as output increases and decreases in total as output decreases.