If a Good Has an External Cost, Then the Marginal

question 72

Multiple Choice

If a good has an external cost, then the marginal private cost curve

• A) lies below the marginal social cost curve.
• B) is negative.
• C) lies above the marginal social cost curve.
• D) is the same as the marginal external cost curve.

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Definitions:

Operating Revenues

Revenues generated from a company's primary business activities.

Assets

Resources owned by a business that have economic value and are expected to provide future benefit.

Liabilities

Financial obligations or debts that a company owes to others, which must be paid back in the future.

Operating Income

A measure of a company's profit generated from its core business operations, excluding deductions of interest and taxes.