In a Competitive Market with No Externalities

question 171

Multiple Choice

In a competitive market with no externalities,

• A) the consumer surplus is equal to zero because of competition.
• B) buyers cannot control the price, so the consumer surplus is zero.
• C) at the equilibrium price, marginal benefit exceeds marginal cost.
• D) at the equilibrium price, marginal benefit equals marginal cost.
• E) at the equilibrium price, the total amount of consumer surplus equals the total amount of producer surplus.

Understand the concept of qualitative and quantitative forecasting in business planning.

Recognize the different types of plans (strategic, tactical, operational, and contingency) and their roles in implementing a business strategy.

Understand the importance and function of policies and procedures in organizational operations.

Identify the role of top-level, middle-level, and lower-level management in long-range planning.

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Definitions:

Capital

Financial assets or resources that businesses or individuals use to fund operations, investments, and growth.

Ordinary Business Income

Income earned from the normal business operations, subject to regular tax rates.

Subchapter S

A section of the Internal Revenue Code that allows corporations to pass income directly to shareholders and avoid double taxation while retaining the benefits of corporate structure.

Schedule K-1

A tax form used to report a beneficiary's share of income, deductions, and credits from a partnership, S corporation, or trust.