When the Market for a Good Is in Equilibrium

question 111

Multiple Choice

When the market for a good is in equilibrium,

• A) consumer surplus will equal producer surplus.
• B) the total value created for consumers will equal the total cost of production for business firms.
• C) all units valued more highly than the opportunity cost of production will be supplied.
• D) all units that have value will be produced, regardless of their cost of production.

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Definitions:

Total Materials Costs

The total expense incurred by a company for the materials that are used in the production process of its goods or services.

Manufacturing Cost

Direct expenditures involved in creating goods, such as components, employee wages, and additional production overhead.

Conversion Cost

The combination of labor and overhead costs incurred to convert raw materials into finished products.

Materials Cost

The total expense incurred in acquiring raw materials used in the manufacturing process of products.