If Companies Who Internalized an Externality Want to Supply More

question 73

Multiple Choice

If companies who internalized an externality want to supply more at any given price compared to the original supply,they must have internalized a:

• A)positive externality.
• B)negative externality.
• C)network externality.
• D)social externality.

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Definitions:

Hypothetical Consumer

An idealized representation of a consumer used for theoretical purposes, reflecting average behaviors and responses to market changes.

Utility-Maximizing Combination

A selection of goods and/or services that provides the highest level of satisfaction or utility to a consumer, given their budget constraints.

Total Utility

The total satisfaction or benefit received by consuming a particular quantity of a good or service.

Marginal-Utility Schedules

Charts or tables showing the relationship between the quantity of a good consumed and the marginal utility or satisfaction received from consuming each additional unit.