-In the Above Figure, If Five Million CDs Per Month

question 184

Multiple Choice

-In the above figure, if five million CDs per month are produced and consumed, that is

• A) better than producing and consuming four million CDs because more is always better than less.
• B) more than the efficient quantity because the marginal social benefit exceeds the marginal social cost.
• C) more than the efficient quantity because the marginal social cost exceeds the marginal social benefit.
• D) less than the efficient quantity because the opportunity cost exceeds the marginal social benefit.

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Definitions:

Withdrawals Account

An account used to track the money that an owner takes out of the business for personal use, also known as draws.

Capital Account

A financial statement that shows the changes in a company's equity, including contributions by and distributions to owners over a period.

Withdrawals Account

A record of the money taken out of a business by its owner(s) for personal use.

Income Summary

A temporary ledger account used in the closing process to summarize the year's revenues and expenses before transferring the net income or loss to the owner's equity account.