If Marginal Benefit Is Equal to Marginal Cost,then the

question 138

Multiple Choice

If marginal benefit is equal to marginal cost,then the

• A) producer surplus is equal to the consumer surplus.
• B) sum of producer surplus and consumer surplus is as large as possible.
• C) sum of producer surplus and consumer surplus equals zero.
• D) market has squeezed out total surplus so that it equals zero.
• E) deadweight loss is more than zero but less than its maximum.

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Definitions:

Power of Test

The probability that a statistical test will correctly reject a false null hypothesis, a measure of a test’s ability to detect an effect when there is one.

Specified Value

A particular or defined value, often set as a criterion or standard.

Null Hypothesis

A hypothesis in statistics that assumes there is no significant difference or effect and serves as the default assumption in a hypothesis test.

Significance Level

A threshold used in hypothesis testing to determine whether to reject the null hypothesis, typically expressed as a probability such as 0.05 or 5%.