If the Market for Diamonds Is a Monopoly, Then

question 23

Multiple Choice

If the market for diamonds is a monopoly, then

• A) the prices of diamonds are too low.
• B) there is an inefficient amount of resources allocated to the diamond market.
• C) the diamond market is efficient.
• D) diamond production is at the amount where the marginal social benefit equals the marginal social cost.

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Definitions:

Price Standard

A predetermined cost that represents what should be paid for a unit of input, such as materials or labor.

Materials Price Variance

Materials price variance is the difference between the actual cost of materials used in production and the standard cost expected, it can indicate changes in market prices or purchasing efficiency.

Quantity Standard

A specific measure established to gauge the expected or optimal quantity of input required to produce a unit of output.

Price Standard

A pre-determined cost per unit of input or output, used for setting budgets and measuring performance.