The Socially Optimal Outcome Is Achieved When the Owner of Property

question 20

Multiple Choice

The socially optimal outcome is achieved when the owner of property rights is a(n) ________ and sells output in a competitive market.

• A) experienced manager
• B) profit-maximizer
• C) skilled land owner
• D) wealthy investor

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Definitions:

Supply

The number of products—goods and services—that businesses are willing to sell at different prices at a specific time.

Demand

The number of goods and services that consumers are willing to buy at different prices at a specific time.

Profits

The financial gain that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.