If a Good That Generates Positive Externalities Was Produced and Priced

question 196

Multiple Choice

If a good that generates positive externalities was produced and priced to take into account these spillover benefits, then its

• A) price and output would increase.
• B) output would increase, but price would remain constant.
• C) price would increase and output would decrease.
• D) price would increase, but output would remain constant.

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Definitions:

Tender Offer

A type of takeover in which an aggressor corporation offers the target shareholders a price above their stock’s current market value.

Market Value

The current price at which an asset or service can be bought or sold in an open and competitive market.

Stock

An equity instrument representing ownership in a corporation, entitling the holder to a proportion of the corporation's profits and assets.

Litigation

The process of taking legal action in court to resolve disputes between parties.