A Negative Externality (That Has Not Been Internalised) Causes the

question 54

Multiple Choice

A negative externality (that has not been internalised) causes the

• A) optimal quantity to exceed the equilibrium quantity.
• B) equilibrium quantity to be either above or below the optimal quantity.
• C) equilibrium quantity to equal the optimal quantity.
• D) equilibrium quantity to exceed the optimal quantity.

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Definitions:

Paid-In Capital

The amount of money that a company has received from shareholders in exchange for stock, exceeding the par value of the shares.

Common Stock

A type of equity security that represents ownership in a corporation and entitles holders to vote on corporate matters and receive dividends.

Stated Value

The value assigned to no-par stock by the company's board of directors, used as the basis for accounting transactions.

No-Par

Refers to stocks issued without a par value, which means they do not have a nominal or face value.