Suppose Jones Sells a Good for $100 at a Yard

question 117

Multiple Choice

Suppose Jones sells a good for $100 at a yard sale. If the producer surplus from the sale is $75, Jones's cost of the good must have been:

• A) $100.
• B) $175.
• C) $25.
• D) equal to the deadweight loss.

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Definitions:

Financial Reporting

The communication of financial information and data about a company's operations, financial position, and cash flows to external users.

Manufacturing Overhead Cost

Indirect factory-related costs that are incurred when producing a product, such as utilities, depreciation, and maintenance.

Variable Cost Per Unit

The cost, which varies with the level of output, of producing one unit of a product.

Variable Cost

Payments that adjust in direct relation to the amount of production or sales, including raw materials and direct labor.