If a Product Has Zero External Costs,then

question 293

Multiple Choice

If a product has zero external costs,then

• A) marginal social cost equals marginal private cost.
• B) marginal social cost is greater than marginal private cost.
• C) marginal social cost is less than marginal private cost.
• D) marginal social cost equals zero.
• E) We need more information to determine the relationship between marginal private cost and marginal social cost.

Comprehend the rights of shareholders, including minority shareholders, and their mechanisms for accountability and protection.

Recognize the legal and financial consequences of directors’ decisions on dividends, loans, and corporate assets.

Grasp the role and legal obligations of promoters in the creation of a corporation.

Identify the duties a shareholder might owe to a corporation and the impact of their actions on corporate governance.

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Definitions:

Significant Barriers

Major obstacles or impediments that prevent entities from entering a market or industry.

Horizontal Demand Curve

A demand curve representing a situation where a small change in price leads to an infinite change in quantity demanded, typically associated with perfectly competitive markets.

Four-Firm Concentration Ratio

A measure that indicates the total market share controlled by the four largest firms within an industry.

Herfindahl Index

A measure of market concentration calculated by summing the squares of the market shares of all firms in the industry.