Use the Following to Answer Questions

question 96

Multiple Choice

Use the following to answer questions:
Figure: Market Failure
-(Figure: Market Failure) In the figure Market Failure, if production in this competitive market is at quantity G:

• 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.

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Definitions:

Liquidated Damages

A predetermined amount of money that must be paid as compensation for failure to perform under a contract.

Penalty Unenforceability

The legal concept that a penalty clause within a contract may not be enforceable if it is deemed excessively punitive rather than a genuine pre-estimate of loss.

Liquidated Damages

A predetermined amount of money that must be paid as compensation for failure to perform certain obligations of a contract.

Damages Determination

The process by which courts calculate the amount of money to be awarded to a party in a lawsuit for losses or injuries suffered.