Which Equation Is TRUE

question 69

Multiple Choice

Which equation is TRUE?

• A) private cost + average cost = social cost
• B) social cost = private cost + external cost
• C) external cost = private cost
• D) private cost + social cost = external cost

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Definitions:

Common Stock

Equity ownership in a corporation, with voting rights and potential dividends.

Initial Value Method

An accounting method for investments where the investment is recorded and maintained at its original cost without adjustment for changes in market value.

Common Stock

Equity ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Equity Method

An accounting technique used to assess the profits earned by investments in other companies, where the investment income is proportional to the ownership stake.