In a Market Where Firms Are Able to Reduce Their

question 156

Multiple Choice

In a market where firms are able to reduce their private costs by shifting costs onto others, which of the following will not happen?

• A)​Inefficiencies will occur.
• B)​Negative externalities will be observed.
• C)​The market prices of products produced by firms will be too low relative to the social optimum.
• D)​Output of the good being produced will be too low.

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Definitions:

Segregation Of Duties

A fundamental control principle that ensures critical tasks are divided among different individuals to prevent fraud and errors.

Physical Controls

Security measures implemented to safeguard tangible assets, such as locks, surveillance cameras, and secure storage facilities.

Documentation Procedures

The processes used for documenting a company's financial transactions, activities, and controls to ensure accuracy and reliability of financial records.

Documentation Procedures

The systematic process of organizing, managing, and maintaining records and documents for business operations.