The Average Cost-Pricing Rule Has Been More Commonly Used in the United

question 89

True/False

The average cost-pricing rule has been more commonly used in the United States than the marginal cost-pricing rule that relies heavily on subsidies.

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Definitions:

Negative Externality

A negative externality exists when a product or decision results in a negative effect on a third party not directly involved in the transaction.

Positive Externality

A benefit that affects someone who did not choose to incur that benefit, often associated with public goods or services.

Profit-Maximizing

The process or strategy employed by businesses to determine the price and output level that delivers the maximum possible profit.

Externality

A side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in the cost of the goods or services involved.