In a Market in Which Firms Are Able to Reduce

question 51

Multiple Choice

In a market in which firms are able to reduce their private costs by shifting costs onto others, _____.

• A)there will be underproduction of a good
• B)there will be positive externalities in production
• C)the market prices of goods produced by firms will be too low relative to the social optimum
• D)output of the good being produced will be too high relative to the social optimum
• E)the intersection of the demand curve and the social cost of production curve will determine the equilibrium quantity

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Definitions:

Total Company Net Income

The aggregate net income of a company across all its business operations and segments.

Time Value

A concept that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.

Sell Now

A directive or decision to sell an asset or a product immediately, often to capitalize on current market conditions or to avoid future losses.

Incremental Revenues

Additional income generated from a new project or decision, above and beyond existing revenues.