An Externality Is Defined as

question 223

Multiple Choice

An externality is defined as

• A)an opportunity cost that is not considered, which causes inefficiency.
• B)a social cost that affects parties external to a transaction.
• C)a transaction that imposes a loss on one of the parties involved.
• D)a "cost of doing business" that cannot be allocated to any particular good.
• E)the increase in cost associated with increased production.

Know the side effects of drugs used to treat schizophrenia.

Understand the use of lithium therapy in treating bipolar disorder.

Understand the concept of culture and its importance in consumer behavior.

Differentiate between enacted and crescive norms within cultural contexts.

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Definitions:

Profit Maximizing

A strategy or process undertaken by a firm to achieve the highest possible profit from its operations.

Price

The amount of money required to purchase a product or service.

Price Elasticity Of Demand

Percentage change in quantity demanded of a good resulting from a 1-percent increase in its price.

Marginal Revenue

The extra revenue received from the sale of an additional unit of a product or service.