Use the Figure Below to Answer the Following Question

question 122

Multiple Choice

Use the figure below to answer the following question. Figure 6.4.1
-Refer to Figure 6.4.1.The graph shows the market for tomatoes.When the government introduces a subsidy for tomatoes at $4 a kilogram,the quantity produced is ________ because ________.

• A)efficient;marginal social cost is less than marginal social benefit
• B)efficient;marginal social benefit equals marginal social cost
• C)inefficient;marginal social cost is less than marginal social benefit
• D)inefficient;marginal social benefit is less than marginal social cost
• E)inefficient;marginal social cost is zero

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Definitions:

Income Summary

An account used temporarily during the closing process to aggregate all income and expense accounts before transferring their balances to the retained earnings account.

Current Assets

Assets that are expected to be converted into cash, sold, or used within a year, including cash, inventory, and receivables.

Current Liabilities

Short-term financial obligations that are due within one year or within the normal operating cycle of a business, whichever is longer.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations by comparing current assets to current liabilities.