The Socially Optimal Level of Output of a Good That

question 64

Multiple Choice

The socially optimal level of output of a good that generates an externality occurs when _____

• A)the marginal private cost of production equals marginal private revenue.
• B)the firm maximizes its profits.
• C)the marginal private cost of production exceeds the marginal social cost of production.
• D)the marginal social cost of production equals the marginal social benefit of production.
• E)the marginal private cost of the good equals the marginal social benefit of the good.

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Definitions:

Break-even Analysis

A financial calculation that determines the point at which revenues equal costs, resulting in neither profit nor loss.

"What-if" Conditions

Hypothetical scenarios used for planning, forecasting, or decision-making that explore different outcomes based on varying parameters or assumptions.

Value Chain Management

The process of managing activities and processes to add value to products or services from production to consumption.

Primary Activities

Core actions or functions that directly relate to the creation, sale, maintenance, and support of a product or service in a business's value chain.