When a Market Experiences a Positive Externality

question 255

Multiple Choice

When a market experiences a positive externality,

• A)the demand curve does not reflect the value to society of the good.
• B)too much of the good is being produced.
• C)the government can internalize the externality by imposing a tax on the product.
• D)the private value is greater than the social value.

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Definitions:

Goodwill

An intangible asset representing the value of a company's brand, reputation, and customer relationships.

Business Communication

The sharing of information between people within an organization or between a company and its customers.

Mistake

An error or fault in action, calculation, opinion, or judgment caused by poor reasoning, carelessness, or insufficient knowledge.

You-Viewpoint

A writing approach that focuses on the reader, often addressing them directly and prioritizing their interests, needs, or feelings.