Scenario 10-1 The Demand Curve for Gasoline Slopes Downward and the Supply

question 51

Multiple Choice

Scenario 10-1
The demand curve for gasoline slopes downward and the supply curve for gasoline slopes upward. The production of the 400th gallon of gasoline entails the following:
a private cost of $2.83;
a social cost of $3.12;
a value to consumers of $3.23.
-Refer to Scenario 10-1. Suppose the equilibrium quantity of gasoline is 440 gallons; that is, Q_MARKET = 440. Then the equilibrium price of a gallon could be

• A)$3.66.
• B)$2.63.
• C)$2.88.
• D)$2.51.

---

Definitions:

T-Accounts

A graphical representation used in accounting to depict the debit and credit sides of an account.

Manufacturing Overhead

All indirect costs associated with manufacturing, such as utilities, maintenance, and salaries for management, not directly involved in the production.

Cost of Goods Manufactured

The total production cost of goods completed during a specific period, including materials, labor, and overhead.

Schedule of Cost

A detailed statement that shows the various costs associated with the production of goods or provision of services during a specific period.