A Firm Has a Constant Marginal Social Cost of Producing

question 93

Multiple Choice

A firm has a constant marginal social cost of producing that equals $2Q.What is the socially efficient level of production for a firm facing an inverse demand P = 60 − 2Q?

• A) 10
• B) 15
• C) 20
• D) 25

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Definitions:

Administrative Costs

Overhead expenses associated with the day-to-day running of a business, involving clerical activities, and support services not linked directly to production.

Service Department Expenses

Costs incurred by the departments that support the primary activities of a business but do not directly engage in production.

Operating Departments

Operating departments refer to the divisions within a company directly involved in its core business activities and operations.

Maintenance Expenses

Costs incurred to keep property, equipment, or assets in efficient operating condition, not improving but merely maintaining them.