If External Costs Are Included and Added to a Firm's

question 37

Multiple Choice

If external costs are included and added to a firm's private costs, then

• A) the demand curve will shift to the right.
• B) the demand curve will shift to the left.
• C) the supply curve will shift to the right.
• D) the supply curve will shift to the left.

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Definitions:

Protective Function

A role often played by governmental bodies to ensure the safety and security of its citizens, through measures like law enforcement and military defense.

Legal Enforcement

The process of ensuring compliance with laws, regulations, and rules through sanctions or penalties.

Contracts

Legally binding agreements between two or more parties that establish obligations, rights, and responsibilities.

Derived Benefits

Advantages obtained indirectly from an activity or service, such as economic benefits from environmental conservation.