-The Figure Above Shows the Market for Brooms

question 191

Multiple Choice

-The figure above shows the market for brooms.Which of the following could lead to the production of fewer than 600 brooms?

• A) a monopoly
• B) a deadweight loss
• C) subsidies
• D) an external cost
• E) a big tradeoff

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Definitions:

Variable Component

The part of a cost or expense that varies directly with the level of activity or production volume, in contrast to fixed costs.

Electrical Motor

An electromechanical device that converts electrical energy into mechanical energy, commonly used in various appliances, machinery, and vehicles.

Labor-Hour

A unit of measure representing an hour of work performed by an employee.

Fixed Overhead Volume Variance

The difference between the expected fixed overhead costs based on standard volume and the actual fixed overhead incurred.