The Diagram Below Shows Demand and Supply Curves for Some

question 58

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 is a negative externality in production.In this case,for allocative efficiency.

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

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Definitions:

Total

This refers to the sum or aggregate amount of any given set of numbers or measures.

Columns Balance

The process of verifying that the sum of debit values equals the sum of credit values in an accounting system, ensuring accuracy in records.

Adjusted Trial Balance

A compilation of all account records and their corresponding balances, updated following adjustment entries, utilized for creating financial reports.

General Ledger

A comprehensive record of all of a company's financial transactions, used to compile financial statements.