Benefits That Accrue Directly to the Decision Maker of a Market

question 62

Multiple Choice

Benefits that accrue directly to the decision maker of a market exchange are called _______ benefits.

• A)private
• B)network
• C)external
• D)social

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Definitions:

P = MC

An equation that states that the price (P) of a product is equal to its marginal cost (MC), indicating the point at which the production of one more unit of a good or service is exactly covered by the sale price, often used in the context of perfect competition markets.

MC > ATC

Denotes a situation in which the marginal cost of producing an additional unit of a good is greater than the average total cost, implying that producing more of the good will increase the per unit cost.

Positive Profits

When a company or business generates earnings that exceed its costs and expenses, resulting in a net gain.

Market Price

The prevailing rate at which a good or service is available for purchase or sale on the open market.