Advertising Costs Are

question 63

Multiple Choice

Advertising costs are:

• A)avoidable and fixed.
• B)fixed and sunk.
• C)variable and sunk.
• D)avoidable and variable.

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Definitions:

External Cost

Costs of a transaction that affect people other than the buyer or seller, typically not reflected in the market price, such as pollution or other negative externalities.

Negative Production Externality

An economic situation where the production process results in a harmful effect on third parties or the environment, which is not reflected in the cost of production.

Positive Production Externality

A situation where the production of a good or service results in beneficial effects for other people or entities that were not involved in the transaction.

Public Good

A good that is non-excludable and non-rivalrous, meaning it can be consumed by anyone without reducing its availability to others.