Answer:
Option (c) is correct.
Explanation:
During an economic activity between the two parties, if the third party is affected (Positively or negatively) by this economic transaction then this is known as externality.
There are two types of externalities:
(i) Positive externality: When the third party is positively affected by an economic transaction between the two parties.
(ii) Negative externality: When the third party is negatively affected by an economic transaction between the two parties.
Now, suppose there is a steel manufacturing company for the consumers. But the people who lives near this company have to bear the cost of the pollution created by the company. This is a negative externality.
Answer:
$210,000
Explanation:
The computation of the external price is shown below
Making cost = buying cost
$120,000 + $25,000 + $45,000 + $30,000) = external price + Unavoidable fixed cost (30,000-20,000)
$220,000 = External price + $10,000
So,
External price = 210,000
Hence, the same is to be considered
Therefore the external price is $210,000
Retained Earnings = $86,000
Accounting Equation…Assets= Liabilities + Owners Equity
Assets (Cash, acct rec, equipment, building, land) = $421,000
Liabilities (Notes payable, accounts payable)= $260,000
Equity (capital stock) = $75,000
Liabilities + Equity= $335,000
Retained Earnings flows into equity
$421,000-$335,000= $86,000
$335,000+86,000= $421,000
So the equation balances.
Sorry I don’t understand this language
