Use the Following to Answer Question(s): Market Failure

question 104

Multiple Choice

Use the following to answer question(s) : Market Failure

-(Exhibit: Market Failure) If the market produces quantity G, then:

• A) marginal benefit is less than marginal cost.
• B) marginal benefit is equal to marginal cost.
• C) marginal benefit is greater than marginal cost.
• D) price is equal to marginal cost and less than marginal benefit.

---

Definitions:

Markup

The amount added to the cost price of goods to cover overhead and profit.

Inventory Turnover

A ratio indicating how fast a company sells and replaces its stock of goods during a particular period.

Net Sales

The total revenue from sales after deducting returns, allowances for damaged or missing goods, and discounts.

Inventory

The complete list of items such as property, goods in stock, or the contents of a building.