Consider the accompanying figure to answer the following questions.
-When a positive externality exists,which point best identifies the social optimum?
Definitions:
Compounded Monthly
The process of adding interest to a principal sum of money, with the interest that is added also earning interest, occurring on a monthly basis.
Insurance Annuity
A financial product offered by insurance companies that provides regular payments to the holder for a specified period or for life in exchange for an initial investment.
Rate Of Return
The percentage of gain or loss on an investment over a specified period, representing the profitability as a ratio of original investment.
Heirs
Individuals legally entitled to receive a portion or all of a deceased person’s estate under the laws of inheritance.
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