Exhibit 30-4 ​ Refer to Exhibit 30-4.  If a Negative Externality Exists, Then the Externality

question 108

Multiple Choice

Exhibit 30-4 ​

Refer to Exhibit 30-4.  If a negative externality exists, then the socially optimal output is

• A)Q₁.
• B)Q₂.
• C)Q₁ - Q₂.
• D)Q₂ - Q₁.

---

Definitions:

Sole Proprietorship

A business structure owned by a single individual, where there's no legal distinction between the owner and the business.

Liable

Legally responsible or obligated to face consequences, typically in the form of compensations or reparations.

Profits

Financial gains obtained after subtracting the costs, expenses, and taxes from a business's total revenue.

Employment Law

A branch of law that governs the rights and duties between employers and workers, covering areas such as wages, workplace safety, discrimination, and termination.