The Business Activities of Firm a Confer Positive Externalities on Firm

question 378

Multiple Choice

The business activities of Firm A confer positive externalities on Firm B, and the business activities of Firm B confer positive externalities on Firm A. If the two firms merged, then

• A)their respective markets would move closer to the social optimum.
• B)their respective markets would move further away from the social optimum.
• C)total surplus in their respective markets would decrease.
• D)the merger would serve as an example of a misguided public policy toward externalities.

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Definitions:

Big Five Personality Dimensions

A theory that describes human personality as composed of five broad traits: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Emergent Leadership

Leadership that develops naturally within a group based on members' skills, actions, and the group's needs, rather than through formal assignment.

Dominance

The state or condition of being in control or having superior strength, authority, or influence over others.

Prestige

Rising to the top based on ability, talent, or moral force.