When a Firm Ignores External Costs

question 45

Multiple Choice

When a firm ignores external costs

• A) It is not willing to produce too much of the good at the given price
• B) It is not willing to produce too little of the good at the given price
• C) The good is priced too cheaply in equilibrium
• D) It is willing to produce too much of the good at the given price

---

Definitions:

Available Data

Information that is readily accessible and can be used for analysis or decision-making processes.

High-Low Method

A technique used in cost accounting to estimate variable and fixed cost components of a cost by analyzing the highest and lowest activity levels.

Total Cost Equation

A formula that represents the total cost of manufacturing and selling products, typically defined as the sum of fixed costs plus variable costs.

Units Produced

The total number of complete products manufactured or finished during a specific period of time.