An Externality

question 166

Multiple Choice

An externality

• A) may be positive or negative.
• B) means a rapidly rising cost borne by consumers.
• C) is the cost of producing a good outside the United States.
• D) is the indirect cost, the overhead, of producing a product.

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Definitions:

One More Unit

The concept of producing or acquiring an additional unit of a good or service and analyzing its impact on overall operations or outcomes.

Pure Competition

A market structure characterized by a large number of small firms producing identical products with no single firm influencing the market price.

Perfectly Elastic

Describes a demand or supply situation where quantity demanded or supplied changes by an infinite amount in response to any change in price.

Unique Product

A product that is distinctive and has no exact substitutes in the market, often giving its producer a competitive advantage.