Please help me out in Economics MCQ

[Sijan92]

11 The output of Firm X depends not only on the quantities of factors of production employed by Firm
X. It also depends directly on the level of output of Firm Y.
What does this illustrate?
A complementary goods
B cross-elasticity of demand
C an externality
D joint production

Can anyone explain why the answer is C???

 

[lil^$tar]

external cost incurred by firm x would also affect the output..since dey wud produce less due 2 high cost..hence firm y is needed

 

[Sijan92]

Could you be more specific and give some examples?

 

[HighGrades]

11 The output of Firm X depends not only on the quantities of factors of production employed by Firm
X. It also depends directly on the level of output of Firm Y.
What does this illustrate?
A complementary goods
B cross-elasticity of demand
C an externality
D joint production

Can anyone explain why the answer is C???

Please mention the year/paper/question.

 

[Sijan92]

02 May /Paper 1/ Question 11