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If There Are Consumption Externalities, Then a Competitive Equilibrium Is

question 17

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If there are consumption externalities, then a competitive equilibrium is not necessarily Pareto optimal.


Definitions:

Assembling

The process of combining components or elements to form a complete item or system.

Unit-level Activity

Activities that are performed each time a unit is produced, directly associated with the production of units.

Manufacturing Overhead Costs

Expenses related to the production process that are not directly tied to the product, such as rent, utilities, and salaries of managers.

Activity-based Costing

A costing method that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each.

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