The Graph Shown Displays a Market with an Externality

question 56

Multiple Choice

The graph shown displays a market with an externality. Which of the following statements is true?The market quantity is 7 units.Total surplus could be increased if the government imposed a tax on this good.This shows a positive consumption externality.

• A)I only
• B)II and III only
• C)I and II only
• D)III only

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Definitions:

Demand Types

The classification of consumer desires or needs that drive the production of goods or services, including elastic, inelastic, and unitary demand.

Outbound Systems

Systems that manage the processes involved in the movement of goods from a company to the end user, including packaging, warehousing, and transportation.

Inbound Systems

Technologies or processes focused on managing incoming goods or information into an organization.

Exponential Smoothing

A forecasting technique that applies diminishing weights on past observations to predict future values, often used in inventory and sales forecasting.