In the Case of a Negative Externality,the Social Marginal Cost

question 32

Multiple Choice

In the case of a negative externality,the social marginal cost will

• A)exceed the private marginal cost.
• B)be equal to private marginal cost.
• C)fall short of private marginal cost.
• D)bear no significant relation to private marginal cost.

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Definitions:

Oligopolies

A market structure characterized by a small number of large firms that dominate the market, often leading to limited competition and higher prices.

Collusion

An agreement, often illegal, between firms to limit competition by fixing prices, dividing markets, or coordinating production.

Concentration Ratio

A measure of the total output produced in an industry by a given number of firms, usually the largest in the industry, indicating the degree of market concentration.

Herfindahl-Hirschman Index

A measure used to calculate the level of competition within an industry, represented by the sum of the squares of the market shares of all firms in the industry.