A Negative Externality Exists If

question 134

Multiple Choice

A negative externality exists if

• A)there are price controls in a market.
• B)there are quantity controls in a market.
• C)the marginal social cost of producing a good or service exceeds the private cost.
• D)the marginal private cost of producing a good or service exceeds the social cost.

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Definitions:

Unlimited Liability

A legal status where the business owner's personal assets can be used to satisfy the debts and liabilities of the business.

Board of Directors

A group of individuals elected by the shareholders of a corporation to oversee and make decisions regarding the company's direction and policies.