A Species of Snakes Became Extinct Due to Pollution in a River

question 45

Multiple Choice

A species of snakes became extinct due to pollution in a river where the snakes once lived.This is an example of

• A)a market failure caused by an externality.
• B)a market failure caused by market power.
• C)a market failure caused by equality.
• D)There is no market failure in this case.

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Definitions:

Break-even

The point at which total revenues and total expenses are equal, resulting in no net loss or gain.

Monthly Dollar Sales

The total sales revenue earned by a business within a month, measured in dollars.

Variable Expenses

Costs that change in proportion to the activity of a business, such as sales or production levels.

Fixed Expenses

Costs that do not change in total despite fluctuations in the volume of goods or services produced or sold.