If External Costs Are Included and Added to a Firm's

question 37

Multiple Choice

If external costs are included and added to a firm's private costs, then

• A) the demand curve will shift to the right.
• B) the demand curve will shift to the left.
• C) the supply curve will shift to the right.
• D) the supply curve will shift to the left.

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Definitions:

Factory Overhead Costs

Indirect manufacturing costs that are not directly tied to the production of goods, such as utilities, maintenance, and management salaries.

Materials Purchased

The raw materials acquired by a company for use in the production or manufacturing of its goods.

Materials Requisitioned

The process of requesting and withdrawing materials from inventory for production or use.

Production

The act of generating goods and services by blending human effort, resources, and technological advancements.