If a Producer Must Pay the Cost of His or Her

question 218

Multiple Choice

If a producer must pay the cost of his or her pollution because property rights have been assigned,then

• A) pollution will be completely eliminated.
• B) the supply curve will shift rightward as the new costs are added.
• C) the supply curve will shift leftward as the new costs are added.
• D) consumers will now consume more of the good because the external costs are reduced.
• E) there is no longer any marginal benefit from the good or service being produced.

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Definitions:

Total Common Equity

The sum of a company's equity capital and retained earnings, representing the ownership interest of common shareholders.

EPS

Earnings Per Share, a measure of a company's profitability calculated by dividing its net income by the number of outstanding shares.

Shares Outstanding

The total number of shares of a company that are currently owned by investors, including both public and institutional holdings.

P/E Ratio

Stands for Price-to-Earnings Ratio, a valuation metric used to compare a company’s current share price to its per-share earnings.