Using a Supply and Demand Diagram, Demonstrate How a Positive

question 146

Short Answer

Using a supply and demand diagram, demonstrate how a positive externality leads to market inefficiency. How might the government help to eliminate this inefficiency?

---

Definitions:

Operating Expenditure

The costs associated with the day-to-day operations of a business, including salaries, rent, and utilities.

Financial Position

The snapshot of a company's assets, liabilities, and equity at a specific point in time, providing insight into its economic resources and obligations.

Operating Condition

The current state and functioning status of a company's operational processes and resources.

Insurance

A contractual arrangement where an insurer agrees to compensate the insured for specified loss, damage, illness, or death in return for payment of a premium.