Once a Firm Is Made to Internalize a Negative Externality

question 199

Multiple Choice

Once a firm is made to internalize a negative externality, the price will

• A) increase and output will decrease.
• B) increase and output will increase.
• C) decrease and output will decrease.
• D) decrease and output will increase.

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Definitions:

Production-oriented Era

A period in business history when the focus was on manufacturing efficiency, without much emphasis on consumer needs or market demand.

Sales-oriented Era

The sales-oriented era refers to a period in marketing history where the primary focus was on selling products through aggressive sales techniques, without much emphasis on customer needs or product quality.

Market-oriented Era

A period in business thought where the primary focus is on understanding and meeting the needs and wants of consumers through market research and product adaptation.

Value-based Marketing

A marketing strategy focused on providing and communicating the unique value of a product or service to the customer.