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:

Budget

An internal financial plan that forecasts expenses and income over a set period of time.

Strategic Financial Plan

A comprehensive evaluation and planning document that outlines an organization's financial goals and the strategies to achieve them.

Forecast

A prediction or estimate of future events or trends, often based on analysis of past and current data.