If Negative Externalities Are Created in the Production of a Good

question 120

Multiple Choice

If negative externalities are created in the production of a good, then society will:

• A)​produce too much of the good since the marginal private cost to firms is less than the marginal social cost.
• B)​produce too little of the good since the marginal private cost to firms is less than the marginal social cost.
• C)​produce too much of the good since the marginal private cost to firms is greater than the marginal social cost.
• D)​produce too little of the good since the marginal private cost to firms is greater than the marginal social cost.

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Definitions:

Distributed Leadership Theory

A conceptual framework suggesting leadership roles are shared within a group or organization, rather than being vested in a single leader.

Declining Performance

A decrease or deterioration in the effectiveness, efficiency, or quality of an individual's or organization's output.

Existing Strategy

The current plan or course of action implemented by an organization to achieve its objectives.

Incremental Changes

Small, gradual modifications or adjustments made over time to improve a process, system, or product.