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Using a Graph Showing Private Marginal Cost, Private Marginal Benefit

question 127

Essay

Using a graph showing private marginal cost, private marginal benefit, and social marginal benefit, show how government subsidies of research and development might mitigate the limited idea creation effect of spillovers.


Definitions:

Total Asset Turnover

A ratio calculating how effectively a company utilizes its assets to produce sales income.

Return on Equity

A measure of a corporation's profitability, indicated by the amount of net income returned as a percentage of shareholders equity.

Return on Assets

A financial ratio indicating how efficiently a company uses its assets to generate profit.

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