If the Social Cost of Producing a Good or Service

question 9

Multiple Choice

If the social cost of producing a good or service exceeds the private cost,

• A)a positive externality exists.
• B)the sum of consumer surplus and producer surplus is maximised.
• C)the market achieves economic efficiency.
• D)a negative externality exists.

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Definitions:

Revenue Management

The strategic analysis and optimization of sales growth and profitability, particularly through pricing and inventory control.

Marginal Revenue

The extra revenue generated by the sale of an additional unit of a product or service.

Spot Market

A Spot Market is a public financial market in which financial instruments or commodities are traded for immediate delivery and payment.

Bulk Sale

Involves the wholesale of goods in large quantities, typically at a discounted price.