After Correcting an Externality,the Equilibrium Price and Quantity Both Rose

question 143

Multiple Choice

After correcting an externality,the equilibrium price and quantity both rose.The externality must have been a(n)

• A) negative externality.
• B) positional externality.
• C) prisoner's dilemma.
• D) positive externality.
• E) external cost.

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Definitions:

Operating Assets

Assets that are used for the core operations of a business, necessary for creating goods or services to be sold.

Residual Income

Operating income that remains after deducting all required costs of capital from net operating profits, often used in performance measurement.

ROI

ROI, or Return on Investment, measures the efficiency or profitability of an investment by dividing the net profit from the investment by the initial cost of the investment, typically expressed as a percentage.

Residual Income

The income that an entity generates after accounting for all operational and capital expenses, often used to assess the profitability of investment centers within a business.