Assuming There Are No Externalities, If a Firm Produces an Output

question 16

Multiple Choice

Assuming there are no externalities, if a firm produces an output level where the benefits to consumers ________ the cost to suppliers to produce it, then price is ________ marginal cost.

• A) are less than; greater than
• B) exceed; greater than
• C) exceed; less than
• D) equal; less than

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Definitions:

Constricted

Limited or narrowed in scope or freedom; often refers to a feeling of tightness or restriction in emotional expression or physical space.

Dim Light

Low-intensity illumination that provides a subdued visual environment.

Cornea

The clear, dome-shaped front surface of the eye that helps to focus light onto the retina.

Window

An opening in the wall of a building, vehicle, or container, typically covered with glass, that allows light and air to enter and people to see out; metaphorically, an opportunity or period of time.