Price Will Increase and Output Will Decrease Once Government Makes

question 211

Multiple Choice

Price will increase and output will decrease once government makes a firm

• A) internalize a negative externality.
• B) externalize a negative externality.
• C) internalize a positive externality.
• D) externalize a positive externality.

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Definitions:

Tax Rate

The percentage of income or value of a good, service, or asset collected by the government as tax.

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding the cost of materials and direct labor.

Interest Expense

The cost incurred by an entity for borrowed funds, typically reflected in the income statement as a deduction from earnings.

Accounts Receivable Turnover

A financial ratio that measures how often a company collects its average accounts receivable balance over a period.