FIGURE 12-1 -Refer to Figure 12-1, Which Represents a Hypothetical Market for a Hypothetical

question 13

Multiple Choice

FIGURE 12-1

-Refer to Figure 12-1, which represents a hypothetical market for steel. To internalize the externality, what is the total amount that the firms have to pay society equal to?

• A) AC
• B) ACB
• C) OHAD
• D) FHAC

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Definitions:

Financing Activities

Transactions related to raising and repaying capital, such as issuing stocks or bonds and paying dividends.

Net Cash

The amount of cash that is available after all debts and expenses have been paid.

Investing Activities

Transactions involving the acquisition or sale of long-term assets and other investments not included in cash equivalents.

Statement Of Cash Flows

A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents.