Consider an Ordinary Rivalrous Good,provided in a Competitive Market

question 109

Multiple Choice

Consider an ordinary rivalrous good,provided in a competitive market.At the socially optimal level of provision of this good,the marginal

• A)cost of production of this good is zero.
• B)cost of production of the last unit of the good is equal to the consumers' marginal willingness to pay.
• C)sacrifice society needs to make to supply the last unit of the good is more than each consumer's marginal willingness to pay.
• D)cost of production of the last unit of the good is more than all consumers' combined marginal willingness to pay.
• E)cost of production of the last unit of the good is equal to all consumers' combined marginal willingness to pay.

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Definitions:

Cash Cycle

The time period between the outlay of cash for the production process and the collection of cash from customers.

Fixed Asset Requirements

The necessary investments in long-term assets like property, plant, and equipment that a business needs to carry out its operations.

Return On Assets

A financial ratio indicating how profitable a company is relative to its total assets, calculated by dividing net income by total assets.

Operating Cycle

The duration between a company's purchase of inventory and the collection of accounts receivable generated from sales of that inventory.