Suppose That a Negative Externality Is Created by the Production

question 350

Multiple Choice

Suppose that a negative externality is created by the production of good X. Which of the following statements is correct?

• A)The social cost of producing good X includes the private cost plus the cost to bystanders of the externality.
• B)The increased social cost can be graphed as a decrease in demand.
• C)The market equilibrium quantity will be the socially optimal quantity as long as the government does not interfere.
• D)Both a and b are correct.

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Definitions:

Integrative Mechanism

A system or process designed to ensure coordination and collaboration among different parts or functions within an organization, enhancing overall efficiency and effectiveness.

Structural Configurations

Refers to the arrangement and organization of elements within a system, often used in the context of organizational theory to describe the structure of a company or institution.

Environmental Uncertainty

The degree of unpredictability and complexity in an organization’s external environment.

Organizations

Groups of people with a particular purpose, such as businesses, governments, or charities, structured to achieve collective goals.