An External Cost Is Built into the Market Price of a Good

question 101

True/False

An external cost is built into the market price of a good and thus paid by the consumers.

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Definitions:

Factoring Commissions

Factoring commissions are fees paid to a factor, or financial intermediary, for advancing funds to a business by purchasing its accounts receivable.

Accounts Receivable

Amounts owed to a business by its customers for goods or services delivered or used but not yet paid for.

Loss

The result when a company's expenses exceed its revenues during a specific period of time.

Expense

An outflow of money or other resources, incurred to generate revenue, which is recognized in the income statement.