If the Production of a Product Is Associated with an External

question 44

Multiple Choice

If the production of a product is associated with an external benefit, and the firm does not consider the external benefit when deciding how much to produce, then the firm will produce:

• A) the efficient level of output, as long as P = MC
• B) the efficient level of output, as long as the firm is perfectly competitive
• C) an output level that is greater than the efficient one
• D) an output level that is less than the efficient one

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Definitions:

Tongue

A muscular organ in the mouth that aids in chewing, swallowing, and taste sensation.

Salivary Glands

Glands located in the mouth that produce saliva, aiding in digestion and maintaining oral health.

Pepsinogen

The inactive precursor of pepsin, a digestive enzyme that is secreted by the stomach wall and activates in gastric acid.

Chief Cells

Cells found in the stomach and parathyroid glands that are responsible for secreting pepsinogen and parathyroid hormone, respectively.