A Company Earns $200,000 in Profit

question 77

Multiple Choice

A company earns $200,000 in profit.The total costs paid by the firm are $800,000.Production of the goods contaminates the river and small lakes,which reduces the profits of salmon fishermen by $90,000.The external cost to society of the company's production is

• A) $90,000.
• B) $110,000.
• C) $200,000.
• D) $600,000.

---

Definitions:

Marginal Adjustment

Small, incremental changes made to a plan, system, or calculation in response to changes in circumstances or new information.

Marginal Changes

Small incremental adjustments to a plan of action, often analyzed in economics to understand the effects of slightly altering production, consumption, or investment.

Normative Economic Statements

Statements that reflect an opinion or judgment about what ought to be in the economy, focusing on what should happen or what ought to be.

Microeconomics: A Contemporary Introduction

An educational resource that provides an updated overview of the principles and applications of microeconomics.