If Output Is Produced at the Level at Which the Marginal

question 188

Multiple Choice

If output is produced at the level at which the marginal social benefit curve and the supply curve intersect, then

• A)the level of output is socially desirable.
• B)the level of output results in a net social cost.
• C)the level of output results in a net social benefit.
• D)producers will incur losses.
• E)there will be no buyers in the market.

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Definitions:

Facility-Level Activity

Operations and actions at the plant or facility level that are necessary for production but not tied to specific units produced.

Batch-Level Activity

Operations or tasks that are performed for each batch of goods produced, irrespective of the overall production volume.

Direct Labour-Hours

The total hours of labor directly involved in production, used to allocate costs or measure productivity.

Traditional Costing System

A cost allocation system that assigns costs to products based on an average overhead rate, without the detailed processes of activity-based costing.