When a Subsidy Is Imposed on a Market with a Positive

question 103

Multiple Choice

When a subsidy is imposed on a market with a positive externality, efficiency:

• A)is not affected.
• B)decreases.
• C)increases.
• D)drops to zero.

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Definitions:

Formula

A mathematical equation or rule expressed in symbols, often used in scientific, mathematical, or financial calculations.

Variable Overhead Efficiency Variance

The difference between actual variable overhead and the standard cost, reflecting efficiency in using resources that vary with production volume.

July

The seventh month of the year in the Gregorian calendar, often associated with the peak of summer in the Northern Hemisphere.

Variable Overhead Rate Variance

The difference between the actual variable overhead costs and the expected costs based on the standard variable overhead rate.