In economics, benefits or costs that are not included in the market price of goods or services. For example, the cost of natural resource depletion, pollution and other environmental and social factors are externalities that often are not factored into the market price of a product.
Example of Externalities:
As fossil fuel prices are being subsidized by the government; this allows products to be sold at a cheaper price in the US market. The subsidized price of fossil fuels hides the true cost of burning it, also called externalities.