If There Are External Benefits or Positive Externalities Associated with the Consumption

question 95

Multiple Choice

If there are external benefits or positive externalities associated with the consumption of a good or service:

• A)the private demand curve will overestimate the true demand curve.
• B)the private demand curve will underestimate the true demand curve.
• C)consumers will be willing to pay for all these benefits in private markets.
• D)the market demand curve will be the vertical summation of the individual demand costs.

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Definitions:

Revenue Realized

Income that a company has earned and received payment for, typically from sales of goods or services.

Sale Price

The amount of money for which a product or service is sold to the consumer.

Par Value

The nominal or face value of a stock or bond, as stated by the issuing company.

Prior Period Adjustment

Adjustments made to amend previously issued financial statements for errors or changes in accounting principles.