If the Market Price of a Good Does NOT Include

question 238

Multiple Choice

If the market price of a good does NOT include all of the costs and benefits that arise from the production or consumption of the good, then

• A) the market is perfectly competitive.
• B) an externality is present.
• C) society is consuming and producing the optimal amount of the good.
• D) resources are properly allocated.

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Definitions:

Inventory Increase

A rise in the quantity of products or materials that a company has available for sale or use, which is often an indicator of production levels or sales expectations.

Cash Discount

A reduction in the amount due by a buyer if payment is made within a specified period.

Credit Financing

The process of borrowing funds from lenders to finance business operations, purchases, or investments, typically through loans or issuing bonds.

Source Of Financing

Various means through which a business can obtain funds, including equity, debt, grants, and loans, to support its operations.