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Studentka2010 [4]
3 years ago
10

An externality arises when a firm or person engages in an activity that affects the wellbeing of a third party, yet neither pays

nor receives any compensation for that effect. If the impact on the third party is beneficial, it is called a ________ externality.
a. Positive
b. Negative
c. Both a & b.
Business
1 answer:
Lynna [10]3 years ago
5 0

Answer:

The correct answer is letter "A": Positive.

Explanation:

Externalities are defined as situations in which a third party is affected by the actions of an individuals or organization without the third party to be involved in the individual's or organization's operations. Though, not all the externalities are negative.  

A positive externality is one in which the third party benefits from other parties' actions. For instance, college students by studying benefit the whole society where they live by increasing the education level in that region.

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Answer:

c. flexible-price

Explanation:

A flexible pricing policy provides room for the business and the customer to negotiate for the final price of a product.  In other words, the price indicated on the item is not fixed.  The seller and buyer can agree to alter it either upwards or downwards.

A flexible pricing strategy enables a business to adjust its prices to suit the market demand. It will allow a company to counter low prices by competitors in cases of price wars. In some instances, businesses set slightly high prices to provide for negotiations.  Flexible pricing is common, especially in tailor-made products.

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