The Diagram Below Shows Demand and Supply Curves for Some

question 25

Multiple Choice

The diagram below shows demand and supply curves for some perfectly competitive market.
FIGURE 16- 2
-Refer to Figure 16- 2.Suppose that the marginal benefit curve (MB) includes all social benefits and that there are no externalities in production.In this case,for allocative efficiency.

• A)P1 and Q1 are appropriate
• B)the price P1 is appropriate but the quantity Q1 is too high
• C)the price P1 is appropriate but the quantity Q1 is too low
• D)the price P1 is too high but the quantity Q1 is appropriate
• E)the price P1 is too low but the quantity Q1 is appropriate

Understand the process for identifying and making appropriate consolidation adjustment entries involving sales revenue, cost of sales, and inventory.

Recognize the implications of intragroup asset transfers, including plant and equipment, on consolidated financial statements.

Analyze the effects of intragroup transactions on non-current asset values and depreciation adjustments in consolidation.

Grasp the principles behind the treatment of advances and loans within a group for consolidation purposes.

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Definitions:

Average Fixed Costs

The fixed costs of production divided by the quantity of output produced, decreasing as production increases.

Annual Fixed Cost

The total of all business expenses that remain constant regardless of any change in production levels or sales volume over a year.

Total Output

The aggregate quantity of goods or services produced by an economy, sector, or production process over a specific period.

Barbershop

A place of business where people, typically men, go to get haircuts and often beard trims or shaves.