Which of the Following Statements Is Correct

question 105

Multiple Choice

Which of the following statements is correct?

• A)Internalizing a negative externality will cause an industry to decrease the quantity it supplies to the market and decrease the price of the good produced.
• B)Internalizing a negative externality will cause an industry to decrease the quantity it supplies to the market and increase the price of the good produced.
• C)Internalizing a negative externality will cause an industry to increase the quantity it supplies to the market and decrease the price of the good produced.
• D)Internalizing a negative externality will cause an industry to increase the quantity it supplies to the market and increase the price of the good produced.

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Definitions:

Hypothetical Consumer

A theoretical or model consumer whose purchasing decisions and behavior are used to analyze the demand side of the market.

Product X

This term is unspecified and could refer to any product or item being discussed or analyzed in a specific context.

Total Utility

The complete pleasure or advantage a customer gets from using a certain amount of products or services.

Rational Consumer

An economic concept of a consumer who seeks to maximize utility or satisfaction from goods and services within their budget constraints.