Consider an Industry That Produces an Output Q with Marginal

question 111

Multiple Choice

Consider an industry that produces an output Q with marginal private cost (MC) and marginal social cost (MSC) as given in the table: Which of the following is true?

• A) The production of each additional unit results in a larger marginal external cost.
• B) The production of each additional unit results in the same marginal external cost.
• C) The production of each additional unit results in a lower marginal external cost.
• D) There are no marginal external costs associated with the production of this good.

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Definitions:

Retail Feed Stores

Shops or outlets that specialize in selling feed and other supplies for animals to the general public.

Wholesalers

Businesses that purchase goods in large quantities from manufacturers or distributors and then sell them in smaller quantities to retailers or other businesses.

Wholesaler

A type of business that purchases goods in large quantities from manufacturers or importers and sells them to retailers, other wholesalers, or occasionally to final consumers.

Intermediary

A person or organization that acts as a mediator or agent between parties, especially in a business or financial transaction.