The Costs or Benefits of a Market Activity That Affect

question 149

Multiple Choice

The costs or benefits of a market activity that affect a third party are called

• A) externalities.
• B) public goods.
• C) club goods.
• D) internal costs.
• E) common-resource goods.

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Definitions:

Fixed Cost

A cost that does not change with an increase or decrease in the number of goods or services produced or sold.

Production Costs

Direct costs associated with the manufacturing of goods, including labor, materials, and overhead expenses.

Variable Manufacturing Costs

Expenses that vary directly with the level of production, such as raw materials and labor.

Book Value

The net value of a company's assets, calculated by subtracting its liabilities from its total assets.