Which of the Following Is True Concerning Negative Externalities

question 82

Multiple Choice

Which of the following is true concerning negative externalities?

• A) Firms tend to produce more than the efficient level of output.
• B) Society gains because firms do not pay the external costs of production.
• C) Perfect competition is better than monopoly from the viewpoint of society even in the presence of negative externalities.
• D) With negative externalities, a monopoly will always produce an output level less than is socially efficient.

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Definitions:

Net Fixed Assets

The total value of a company's physical assets (like machinery, buildings, equipment) minus depreciation, indicating the net book value of physical assets.

Net Income

A business's residual profit after all operational costs and tax charges are extracted from its total revenues.

Common-Size Statement

A financial statement in which all items are expressed as a percentage of a common base figure, facilitating comparison across different periods or companies.

Net Fixed Assets

The value of a company’s long-term, tangible assets minus any depreciation, representing the net book value of physical assets.