Use the Figure Below to Answer the Following Question

question 115

Multiple Choice

Use the figure below to answer the following question.

Figure 5.3.4
-Refer to Figure 5.3.4. The graph shows the market for cell phones. When production is efficient, total surplus is ________ and the cost of producing the cell phones sold is ________.

• A)$2,250; $2,250
• B)$2,250; $3,000
• C)$1,500; $750
• D)$750; $1,500
• E)$1,500; $2,250

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Definitions:

Profit Margin

A financial metric that measures the amount of net income earned with each dollar of sales generated by comparing net income and revenue.

Days' Sales

A financial metric that calculates the average time it takes for a company to convert its inventory into sales.

Receivables Ratio

The Receivables Ratio, also known as the Accounts Receivable Turnover Ratio, measures how efficiently a company collects cash from its customers by comparing sales to the average receivables.

Outstanding Accounts

Accounts or invoices that have been billed but not yet paid by customers.