Consider a Setting in Which There Is a Negative Externality

question 59

Multiple Choice

Consider a setting in which there is a negative externality, but no positive externality.  It follows that

• A)MSB > MPB.
• B)the market outcome is efficient.
• C)MSC > MPC
• D)MPC > MSC

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Definitions:

Finance Department

A corporate sector tasked with overseeing financial operations, risk management, and strategic planning related to finance.

Dividends

Dividends are payments made by a corporation to its shareholder members, usually extracted from the company's earnings.

Selling Stock

The process of offering shares of a company's capital to investors in exchange for capital, diluting ownership but potentially raising funds for growth.

S-type Corporation

A special designation that allows corporations to pass corporate income, credits, and deductions directly to their shareholders for federal tax purposes.