Question

what is a spillover cost?

Answer 1

The spillover costs (or negative externalities) are the "social cost" that is not included in the costs of production. Those additional costs are not necessarily related to production, sometimes they are related to consumption.

For example, if visitors to your town buy snowmobiles, and race them around in a park you hike in, the noise and the wear and tear are a cost to you (and everyone else).

Answer 2

distribution costs paid by the middle person