Figure 10-6 -Refer to Figure 10-6. Which Quantity Represents the Socially-Optimal Quantity

question 453

Multiple Choice

Figure 10-6
-Refer to Figure 10-6. Which quantity represents the socially-optimal quantity of output in this market?

• A)Q
• B)Q'
• C)Either Q or Q'. It is necessary to know whether the externality is positive or negative to determine the socially-optimal quantity.
• D)Some quantity between Q and Q'. The socially-optimal quantity depends on the negotiating skills of the interested parties.

---

Definitions:

Salaries Expense

The total amount paid to employees for services rendered during a specific period, recorded as an expense on the income statement.

Accounts Payable

Money owed by a company to its suppliers or vendors for goods and services purchased on credit.

Correcting Entry

A bookkeeping record created to rectify a mistake in the financial reports.

Classified Balance Sheet

A financial statement that organizes assets, liabilities, and equity into subcategories for clearer understanding and analysis.