For an Organic Entity, Such as a Firm,, Path-Dependency Means

question 83

Multiple Choice

For an organic entity, such as a firm,, path-dependency means that:

• A)That this firm's capabilities today are the result of its history
• B)This firm's way forward depends on decisions to be made at future crossroads
• C)This firm's history is dependent upon it developing a clear path forward
• D)There is only one path for this firm to evolve over time

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Definitions:

Marginal Social Cost

The additional cost incurred by society as a whole due to the production of one extra unit of a good or service.

Socially Optimal

A state or outcome in which the total benefits to society are maximized, taking into account all costs and benefits, both private and external.

Artificially Scarce Good

A good that is made scarce through artificial means such as through intellectual property rights or monopoly pricing, despite its capacity for abundant supply.

External Cost

An uncompensated cost that an individual or firm imposes on others; also known as negative externality.