Private Markets Fail to Reach a Socially Optimal Equilibrium When

question 311

Multiple Choice

Private markets fail to reach a socially optimal equilibrium when negative externalities are present because

• A)social costs equal private costs at the private market solution.
• B)private costs exceed social costs at the private market solution.
• C)social costs exceed private costs at the private market solution.
• D)they internalize externalities.

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Definitions:

Strategic Financial Plan

A comprehensive evaluation and planning document that outlines an organization's financial goals and the strategies to achieve them.

Forecast

A prediction or estimate of future events or trends, often based on analysis of past and current data.

Liabilities

Debts that a firm owes to others.