Suppose the Production of a Good Results in Negative Externalities

question 158

Multiple Choice

Suppose the production of a good results in negative externalities. If society produces the output consistent with the intersection of the demand curve and the marginal private cost curve, then

• A)the socially optimal level of output will be produced.
• B)society will incur a net social cost.
• C)society will want more output produced, and producers will be willing to satisfy this desire at a price that society deems acceptable.
• D)all of the above
• E)There is not enough information to answer this question.

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Definitions:

Sales

The transactions of selling goods or services within a specific period.

Total Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue.

Income Statement

A financial statement that shows a company's revenue and expenses over a specific period, displaying net profit or loss.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.