Consider a Market with a Negative Externality

question 64

Multiple Choice

Consider a market with a negative externality.The market will tend to ________ the good because the market participants tend to ignore the ________ of their decision.

• A) overproduce; external benefit
• B) underproduce; external benefit
• C) overproduce; external cost
• D) underproduce; external cost
• E) overproduce; internal benefit

Identify the legal, ethical, economic, and discretionary responsibilities of organizations.

Analyze real-world business strategies through the lens of CSR.

Comprehend the impact of CSR strategies on stakeholder satisfaction and organizational performance.

Describe the utilitarian view of ethical behavior and its significance in business decisions.

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Definitions:

Unsatisfied Demand

A situation where the quantity demanded of a product or service exceeds the quantity supplied at a given price.

Selling Division

A specific segment of a company focused on sales activities, including marketing and distributing products to customers.

Joint Cost

Costs that are incurred in the process of producing two or more products simultaneously and cannot be easily attributed to individual products.

Value Basis

A method for calculating the cost of an investment, typically used to determine the gain or loss on the sale or disposition of the asset.