How Do Strong Ethical Values Benefit a Firm

question 47

Multiple Choice

How do strong ethical values benefit a firm?

• A) They lay the groundwork for a quick increase of profits and short-term success.
• B) They serve as the guardrails put in place to keep the company on track when pursuing its mission.
• C) They provide strong public relations, which can either benefit or hinder competitive advantage.
• D) They emphasize benefiting employees by significantly increasing profit.

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Definitions:

External Cost

A cost of economic activity not borne by the producer or consumer, but rather by a third party or the environment, often leading to market failure.

Efficient Amount

The quantity of a product or service that achieves a perfect balance between economic efficiency and the satisfaction of all market participants.

Government Intervention

Actions taken by a government to adjust or interfere in the economic affairs of a nation, with the intention of achieving economic or societal objectives.

External Cost

Costs of a transaction that affect people other than the buyer or seller, typically not reflected in the market price, such as pollution or other negative externalities.