Asked by
Simran Lalchandani
on Dec 11, 2024Verified
Refer to Figure 5-4. The figure illustrates an industry that generates
A) external benefits.
B) external costs.
C) no externalities.
D) economies of scale.
Externalities
Economic side effects or consequences that affect uninvolved third parties; can be either positive or negative.
Economies of Scale
The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.
- Conduct an analysis on the effect of external costs and benefits upon market efficiency.
Verified Answer
SJ
Learning Objectives
- Conduct an analysis on the effect of external costs and benefits upon market efficiency.