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SVEN [57.7K]
3 years ago
7

Suppose that a cafe enjoys a large increase in customers whenever the jazz club next door features a band playing appealing musi

c because it can be easily heard from the cafe. The jazz club owner decides to purchase the cafe so that he can internalize this positive externality. Which of the following types of private solutions to the externality of appealing music has occurred in this case?
a. Contracts
b. Charities
c. Moral codes and social sanctions
d. Integration of different types of businesses through merger or acquisition
Business
1 answer:
ExtremeBDS [4]3 years ago
7 0

Answer:

D. Integration of different types of businesses through merger or acquisition

Explanation:

Externalities occur when the production or consumption of a particular good or service affects a third-party who is not related to the transaction. A positive externality is one that is favorable and beneficial to the third party and a negative externality is one that is unfavorable and creates a cost to the third party. In this case, the third party is the owner of the cafe and it is a positive externality because the music creates an increase in the number of customers to his/her business.

When the jazz club owner purchases/acquires the cafe, the cafe becomes his. Hence, the benefit felt to the cafe by the music from the jazz club is a benefit that his own new business incurs. Thus, the integration of these two businesses into one helps internalize the positive externality since now the main party involved in the transaction is also the one feeling the positive externality and not a third-party as used to be.

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What is the primary role of consumers in a free market economy?
S_A_V [24]

Answer:

The consumer is the one who pays to consume the goods and services produced.

Explanation:

As such consumers play a vital role in the economic system of a nation. In absence of effective demand the producers would lack a key to motivation

4 0
2 years ago
What is the most important way the federal reserve ensures the United States money supply is safe and in circulation
BlackZzzverrR [31]

Answer:

Federal Reserve increases the money supply in the hands of the public if it buys back issued securities from large banks.

Explanation:

Federal Reserve increases the money supply in the hands of the public if it buys back issued securities from large banks. Conversely, Federal Reserve decreases the money supply in the hands of the public if it sells securities. As a result, the money supply increases.

Federal reserve provides and maintains an effective and efficient payment system. It also regulates banking operations.

5 0
2 years ago
I need help with this question if someone could please help me.
marusya05 [52]
B is the correct answer.
7 0
3 years ago
A firm has a current price of $40 a share, an expected growth rate of 11 percent and expected dividend per share (D1) of $2. Giv
Xelga [282]

Answer:

d. 16% - buy

Explanation:

R = (D1 / P0) + g

Where, R=Expected Return, P0 = Current Market Price = $40, D1=Expected Dividend=$, g = Expected Growth Rate = 11% = 0.11

Expected Return = R = ($2/$40) + 11%

R = 0.05 + 0.11

R = 0.16

R = 16%

Expected Return is higher than the required return of 12%.  Hence, it should be bought (it is expected to give higher return than required)

7 0
3 years ago
Costs, also called differential costs, are the additional costs from selecting a certain course of action.
Ilia_Sergeevich [38]

It is true that Costs, also called differential costs, are the additional costs from selecting a certain course of action.

<h3>What is differential costs?</h3>

Differential cost serves as the  difference between the cost of alternative decisions.

Therefore, It is true that Costs, also called differential costs, are the additional costs from selecting a certain course of action and the  cost do take place when a business have several similar options,

Learn more about differential costs, at

brainly.com/question/25799822

#SPJ1

8 0
2 years ago
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