Which Describes the Economic Meanings of Value and Price

question 73

Multiple Choice

Which describes the economic meanings of value and price?

• A) Value is exchange worth minus marginal benefit and price is the dollars that must be paid.
• B) Value is the marginal benefit obtained and price is the dollars that must be paid.
• C) Value refers to the gain the producer gets from the good or service and price refers to the gain the consumer gets from the good or service.
• D) Value refers to the dollars that must be paid and price refers to the cost of producing the good.
• E) They are the same and both mean the dollars that must be paid.

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Definitions:

Average Total Cost

Average total cost is the total cost of production divided by the total quantity produced, representing the cost per unit of output.

Marginal Cost

The swell in aggregate expenditure tied to the creation of an extra unit of a product or service.

Average Variable Cost

The variable cost (cost that changes with production volume) per unit of output, calculated by dividing total variable costs by the number of units produced.

Profit-Maximizing Level

The point of operation where a business can achieve the highest profit, typically determined by analyzing costs and revenue.