Exhibit 31-5 -Refer to Exhibit 31-5. If a Positive Externality Exists,then the Positive

question 171

Multiple Choice

Exhibit 31-5

-Refer to Exhibit 31-5. If a positive externality exists,then the external benefits associated with the positive externality equal the distance between points ____________ and the socially optimal output is

• A) C and A; Q₁.
• B) D and B; Q₁.
• C) D and B; Q₂.
• D) A and B; Q₂.

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Definitions:

Credited

Recorded or acknowledged as having received something, often used in financial contexts to indicate an addition to certain accounts.

Selling Price

The price at which a product or service is sold to customers.

Retained Earnings

The portion of a company's profits that is not distributed as dividends to shareholders but is instead reinvested in the business or kept as a reserve.

Cash Available

The amount of cash that a company or an individual has on hand or can easily access.