Figure 7-17 -Refer to Figure 7-17.The Equilibrium Allocation of Resources Is

question 298

Multiple Choice

Figure 7-17
-Refer to Figure 7-17.The equilibrium allocation of resources is

• A) efficient because total surplus is maximized at the equilibrium.
• B) efficient because consumer surplus is maximized at the equilibrium.
• C) inefficient because consumer surplus is larger than producer surplus at the equilibrium.
• D) inefficient because total surplus is maximized when 10 units of output are produced and sold.

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Definitions:

Released

In a manufacturing or production context, this term refers to products or goods that have been completed and are ready to be shipped or sold.

Inventories

Assets held for sale in the ordinary course of business, in the process of production for such sale, or in the form of materials or supplies to be consumed in the production process or in the rendering of services.

Year 1

Refers to the first year in a given time series, fiscal period, or timeframe under consideration.

Absorption Costing

An accounting approach that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overhead) in the cost of a product.