The Market Failure of External Cost Is Most Likely to Result

question 82

Multiple Choice

The market failure of external cost is most likely to result if Peanuts 'R' Us:

• A) keeps secret a discovery that excessive consumption of peanut butter causes nearsightedness.
• B) discards broken peanut shells on to an adjacent recreational area in the production of peanut butter.
• C) is subject to performance standard regulations by the PBRC (Peanut Butter Regulatory Commission).
• D) develops a new peanut butter processing machine that enhances competition.

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Definitions:

Emotional Appeal

A persuasive technique used in marketing and advertising that targets the audience's emotions to create a connection with the product or brand.

Cognitive Differentiation

The ability to distinguish between different concepts, ideas, or objects, reflecting a level of cognitive complexity and mental flexibility.

Source Characteristics

Traits or attributes of the communicator or source of information that influence the persuasiveness and effectiveness of a communication message.

Credibility

The quality of being trusted and believed in, often assessed in the context of sources of information or individuals.