An Individual Firm Has Little Incentive to Voluntarily Internalize Any

question 168

Multiple Choice

An individual firm has little incentive to voluntarily internalize any external costs it was creating because:

• A)​it would shift its cost curves downward.
• B)​it would put it at a competitive disadvantage compared to its rivals.
• C)​it would have to increase output to make up for the added costs.
• D)​they do not care at all about other people.

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Definitions:

Mortgage Interest

The interest paid on a mortgage loan, which may be deductible on U.S. federal income tax, reducing taxable income.

Prescription Medicines

Medications that can only be obtained with a doctor's written order and are eligible for certain tax exemptions when used for medical care.

Health Insurance Premiums

The amount paid, often on a monthly basis, for health insurance coverage.

Hospital Fees

Charges levied by hospitals for medical treatments, procedures, room occupancy, and other healthcare services provided to patients.