In the Following Figure,the First Panel Shows a Market Situation

question 39

Multiple Choice

In the following figure,the first panel shows a market situation prior to regulation and the second panel shows the effects of regulation. Figure 12.2 In the figure,
D: Demand curve for automobiles
S₁: Supply curve of automobiles prior to regulation
S₂: Supply curve of automobiles after regulation
FG: Clean up cost per unit
-Refer to Figure 12.2.The regulation will benefit the society if:

• A)area BAJ > area 0FIQ₂.
• B)area AECJ > area IGQ₁Q₂.
• C)area IGQ₁Q₂ > area AECJ.
• D)area BAJ > BAC.
• E)area 0FIQ₂ > area BAJ.

---

Definitions:

Manufacturing Costs

Expenses directly related to the production of goods, including raw materials, labor, and manufacturing overhead.

Equivalent Units

A concept in cost accounting that is used to allocate costs to partially completed goods, measured in the amount of finished goods units.

Conversion Costs

The combined costs of direct labor and overhead expenses incurred to convert raw materials into finished goods.

Materials

The raw substances or components that a company uses in the production of goods or delivery of services.