If a Good That Generates Positive Externalities Was Produced and Priced

question 120

Multiple Choice

If a good that generates positive externalities was produced and priced to take into account these spillover benefits, then its

• A)price and output would increase.
• B)output would increase, but price would remain constant.
• C)price would increase and output would decrease.
• D)price would increase, but output would remain constant.

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Definitions:

Beginning Inventory

The value of a company's stock of goods at the start of an accounting period, serving as a baseline for inventory management.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from its total revenue.

Period End Assets

The total value of all assets owned by a company at the end of a given financial reporting period.

Retail Method

An inventory valuation method used in retail, estimating the ending inventory value by applying a cost-to-retail percentage to the sales at retail.