Question

Choose the statement that is correct.

A. An external benefit results in overproduction.
B. An electric utility creates an external benefit by burning coal.
C. A good with an external benefit is a good from which everyone benefits and no one can be excluded.
D. When an electric utility does not consider the cost of pollution that arises from electricity​ production, the result is overproduction.

Answer 1

C. A good with an external benefit is a good from which everyone benefits and no one can be excluded.

Step-by-step explanation:

An external benefit is considered a positive externality, for this reason, we can say that an external benefit occurs when a company does a certain activity that promotes benefits for it, for other companies and even for the population, even if it was not planned .

With this we can affirm that a good with external benefit is a good that everyone benefits from and nobody can be excluded.

Answer 2

The correct answer is letter A.

Explanation: Overproduction is a production in excess of market absorption possibilities, excess production.

Overproduction occurs when there is more production than the company can sell, resulting in an increase in finished goods inventory. Overproduction hides waste, as many think inventory is considered a valuable asset to the company, when in fact most of it can become obsolete or cost to keep it until it can be sold.

This happens when the production is more than necessary and faster than necessary.