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Kroters Inc. decides to set up its manufacturing plant near Woodsville, a small

ID: 421514 • Letter: K

Question

Kroters Inc. decides to set up its manufacturing plant near Woodsville, a small community of farmers. Kroters is most likely to create a positive externality for the community members of Woodsville if it:

follows the Solow Residual.

reduces the rate of product obsolescence for Woodsville residents.

increases its product life cycle based on consumer demand.

sets up an organic farm near Woodsville.

follows the Solow Residual.

reduces the rate of product obsolescence for Woodsville residents.

increases its product life cycle based on consumer demand.

sets up an organic farm near Woodsville.

Explanation / Answer

The answer is given below:

sets up an organic farm near Woodsville.

A positive externality which means on the benefits enjoyed by the party on owing a business, in the above case Kroters can set up an organic farm near Woodsville to increase on the economic growth.