External Costs and External Benefits Are Collectively Referred to As

question 42

Multiple Choice

External costs and external benefits are collectively referred to as:

• A)externalities.
• B)network externalities.
• C)social externalities.
• D)social welfare.

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Definitions:

Average Fixed Cost

The fixed costs of production divided by the quantity of output produced; these costs decline as production increases.

Marginal Cost

The financial cost of producing an extra unit of a good or service.

Average Total Cost

The total cost of production divided by the quantity of output produced.

Average Variable Cost

Represents the cost that varies with the level of output, calculated by dividing the variable costs by the quantity produced.