Exhibit 30-5 ​

question 143

Multiple Choice

Exhibit 30-5
​

-Refer to Exhibit 30-5. If a positive externality exists then the socially optimal output is

• A)Q₁.
• B)Q₂.
• C)Q₁ - Q₂.
• D)Q₂ - Q₁.

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Definitions:

Net Operating Income

Income from a company's everyday business operations, excluding expenses from interest and taxes.

Monthly Sales

The total revenue generated from the sale of goods or services within a single month.

Advertising Budget

The amount of money a company decides to allocate towards advertising its products or brand over a certain period.

Margin Of Safety

The difference between actual or projected sales and the break-even point, indicating the level of risk in a business.