-The Figure Above Shows the Market for Private Elementary School

question 183

Multiple Choice

-The figure above shows the market for private elementary school education in Chicago.There is no external cost of private elementary education.If the government does not intervene in this market,the deadweight loss equals

• A) 0.
• B) $800,000.
• C) $1,600,000.
• D) more than $1,600,000.
• E) more than $800,000 and less than $1,600,000.

---

Definitions:

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit, indicating how much each unit sold contributes to covering fixed costs and generating profit.

Break-even Point

The point at which total costs and total revenue are equal, meaning that there is no net loss or gain, and the business is not making a profit.

Direct Materials Cost

The cost of raw materials directly used in the production of products or services.

Sales

Revenue generated from the sale of goods or services.