Which concept describes costs or benefits imposed on others that are not reflected in market prices?

The concept that describes costs or benefits imposed on others that are not reflected in market prices is externality. Externalities occur when a transaction between two parties affects a third party who is not involved in the transaction. This can lead to market failures because the true cost or benefit of goods or services is not captured by market prices. For example, a factory that pollutes the environment imposes health costs on local residents that are not included in the price of the factory's products. This misalignment can lead to overproduction or underproduction of goods compared to what would be socially optimal. Understanding externalities is crucial in economics and sociology as it highlights the interconnectedness of social actions and their broader impacts on society and the environment.

The other concepts, while relevant in different contexts, do not fit the definition of costs or benefits not represented in market prices. Scarcity refers to the limited nature of resources relative to unlimited wants, while capitalism describes an economic system characterized by private ownership and free markets. Regulation pertains to laws or guidelines set by authorities to control economic or social activities, but does not specifically address unaccounted costs or benefits in transactions.