If We Produce One More Bottle of Water

question 44

Multiple Choice

If we produce one more bottle of water,

• A)we cannot be acting efficiently.
• B)we incur a marginal cost.
• C)we must move away from market equilibrium.
• D)the price of a bottle of water must rise.
• E)the marginal social benefit from bottled water increases.

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Definitions:

Support Department Costs

Expenses incurred by service departments that do not directly produce goods but support other departments that do.

Total Janitorial Costs

The complete expenses associated with cleaning and maintaining a facility.

Market Value

The current price at which an asset or service can be bought or sold in the open market, subject to supply and demand.

Reciprocal Services Method

A method used in cost accounting to allocate costs between interdependent departments, acknowledging mutual services they provide to each other.