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2 years ago

If there are important external benefits associated with the consumption of a product:_______.

Business

1 answer:

pentagon [3]2 years ago

4 0

Answer:

C. the market demand curve understates the relative importance of the product and resources are therefore underallocated to its production.

Explanation:

Positive external benefits refer to third party positive side effects, above & beyond private marginal benefit to the concerned consumer.

Eg : Education - Its consumption not only affects the concerned person, but the positive trickle down to the people & society around.

Personal consumption decisions are based on : equalisation - of private marginal benefit (demand) curve & private marginal cost curve. However, goods having positive external benefits have real marginal benefit curve increased over private benefit curve, by the extent of extra marginal social benefit.

So, market demand (based on private marginal benefit) curve understates the importance of product, and resources are therefore underallocated to its production (due to undervaluation of demand).

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Alex777 [14]

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2 years ago

Which is not one of the financial costs of a recall? communication costs marketing costs legal costs engineering costs?

Masja [62]

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3 years ago

Naomi has a home loan amount of $120,000. Her monthly principal and interest payment is $679.00 for thirty years. How much inter

Viktor [21]

Answer:

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Explanation:

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2 years ago

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anzhelika [568]

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3 years ago

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butalik [34]

Answer:

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3 years ago