Use the Following Information for Any or All of Questions

question 19

Multiple Choice

Use the following information for any or all of Questions .
Suppose the marginal benefits and marginal costs of tire production in the U.S. are modeled as follows, where Q is in millions:
MSB = 12 - 0.4Q MPB = 12 - 0.3Q MSC = MPC = 2 + 0.1Q
-Based on this model, it is apparent that there is a

• A) negative production externality
• B) positive external benefit
• C) consumption externality measured as MEB = - 0.1Q
• D) negatively sloped MEC function

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Definitions:

Marketing Expenses

Costs associated with promoting a company's products or services, including advertising, promotional materials, and other activities aimed at increasing sales.

Allocating

The process of assigning or distributing resources, costs, or revenues among various accounts, departments, or entities based on specific criteria or formulas.

75% Threshold

Often refers to a specified level of ownership, control, or approval, commonly indicating the portion of voting rights required to pass certain resolutions or to meet regulatory requirements.