When Does an Externality Occur

question 122

Multiple Choice

When does an externality occur?

• A) when one person's production or consumption of a good affects another person
• B) when a producer's long-run average costs fall
• C) when a consumer's marginal utility from consuming a good increases
• D) when international trade leads to improvement in a country's economic welfare

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Definitions:

Consolidation

The act of combining multiple elements, such as data, companies, or assets, into a single, more efficient or cohesive structure.

Computer Manufacturers

Companies specialized in the design, manufacturing, and sale of computers, computer components, and related software and services.

Conglomerate Merger

A type of merger involving companies from unrelated business activities, aiming for diversification and risk reduction.

Competitive Relationship

The dynamics between organizations that are in the same market and compete against each other for customers, market share, and resources.