Figure 7-16 -Refer to Figure 7-16.For Quantities Less Than M,the Value to Than

question 392

Multiple Choice

Figure 7-16

-Refer to Figure 7-16.For quantities less than M,the value to the marginal buyer is

• A) greater than the cost to the marginal seller, so increasing the quantity increases total surplus.
• B) less than the cost to the marginal seller, so increasing the quantity increases total surplus.
• C) greater than the cost to the marginal seller, so decreasing the quantity increases total surplus.
• D) less than the cost to the marginal seller, so decreasing the quantity increases total surplus.

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Definitions:

Profit

The financial gain attained after subtracting total expenses from total revenues.

Competitive Price-Taker

A business that has no control over the market price and must accept the prevailing market price set by supply and demand forces.

Marginal Revenue Curve

A graphical representation showing how marginal revenue varies with changes in quantity sold.

Market Price

The present cost at which a good or service may be purchased or sold on the market.