Which of the Following Statements Is Correct Under a Market

question 52

Multiple Choice

Which of the following statements is correct under a market with externalities?

• A) Social surplus is maximized as long as consumer surplus is maximized.
• B) Social surplus is maximized as long as producer surplus is maximized.
• C) Social surplus is maximized as long as both consumer surplus and producer surplus are maximized.
• D) None of these statements is correct.

---

Definitions:

Sales Revenue

The earnings a business obtains through the sale of products or the delivery of services.

Trade Discount

A reduction in the listed price of a product or service, offered by sellers to buyers in the same trade or industry.

Purchase Price

The amount of money paid to buy goods or services.

Shipping Cost

Expenses associated with the transportation of goods from one place to another.