If a Good That Generates Positive Externalities Were Produced and Priced

question 58

Multiple Choice

If a good that generates positive externalities were 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:

Monopolist's Profits

The earnings a monopoly makes, calculated as total revenues minus its total costs, benefiting from the absence of competition in its market or industry.

Society's Welfare

The overall well-being and quality of life of the members of a society, encompassing economic, social, and environmental factors.

Government Intervention

Actions taken by government to affect the economy, often to correct market failures and promote economic stability.

Monopoly

A market structure characterized by a single seller who has exclusive control over the product or service, leading to limited competition.