If a Negative Externality Exists in a Market, the Marginal

question 264

Multiple Choice

If a negative externality exists in a market, the marginal

• A) private cost exceeds the marginal social cost.
• B) social cost exceeds the marginal private cost.
• C) private benefit exceeds the marginal social benefit.
• D) social benefit exceeds the marginal private benefit.

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Definitions:

Monopoly Power

The ability of a single supplier to control the market price and supply of a product or service.

Brand Loyalty

A consumer's preference to buy a particular brand’s product over others, often reflected in repeated purchases.

Economic Efficiency

A condition in which resources are distributed to optimize the production of goods and services while minimizing costs.

Brand Loyalty

The tendency of consumers to continuously purchase one brand's products over competing ones.