Suppose External Costs Are Present in a Market Which Results

question 60

Multiple Choice

Suppose external costs are present in a market which results in the actual market price of $70 and market output of 150 units. How does this outcome compare to the efficient, ideal equilibrium?

• A) The efficient price would be higher than $70.
• B) The efficient price would be lower than $70.
• C) The efficient price would also be $70.
• D) The efficient output would be greater than 150 units.

---

Definitions:

Infrastructure

The fundamental facilities and systems serving a country, city, or area, including transportation, communication, utilities, and public institutions.

Customer Segments

Distinct groups of people or organizations that a business aims to reach and serve, identified by specific needs, behaviors, demographics, or other attributes.

Business Model Canvas

A strategic management tool that allows companies to document, discuss, and develop their business models through nine key components.

Customer Relationships

The interactions and bonds formed between a business and its customers, crucial for building loyalty and repeat business.