If a good that generates positive externalities were produced and priced to take into account these spillover benefits, then its: price and output would increase.
Definition of Positive Externality: this happens when the consumption or production of a decent causes a benefit to a 3rd party. For example: once you consume education you get a non-public benefit. But there also are benefits to the remainder of society.
When a positive externality is present, the market produces the socially optimal quantity of the great or service, since there's a benefit to society that's not captured by the individual.
When products that make positive externalities are produced, at the market equilibrium output, the social benefit Positive Externality generated by consuming the merchandise exceeds the private benefit. A. people that sleep in one country have the benefit of the assembly of an honest or service that happens in another country.
This occurs when the assembly of an honest person causes a 3rd party benefit. As a result there's a Positive Externality nonstop benefit where the assembly of an honest or service positively impacts a 3rd party. The benefit to the individual or firm is a smaller amount than the benefit to society.
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Answer:
The correct answer is letter "C": how different customers perceive the value of her services.
Explanation:
Different consumers could value goods or services differently depending on what those products represent for them. <em>The higher the utility of the good or service, the more individuals will be willing to pay for it. </em>This situation could affect or benefit providers being this the reason why most of them have a <em>fixed price</em> on what they offer.
Thus, <em>the reason why some of Henriette's customers pay her different rates is that some of them find her services more valuable than others.</em>
Answer:
$28,980
Explanation:
The present value can be calculated by multiplying annual cashflows with the discount factor. The table to calculate the Present Value has been made below.
DATA
Annual benefit = $12,000
Discount rate = 7%
Present value =?
Calculation
Year Cash inflows Discount factor Present Value
6 $12,000 0.666 $7,992
7 $12,000 0.623 $7,476
8 $12,000 0.582 $6,984
9 $12,000 0.544 $6,528
Total $28,980
