Citizens of Tinytown Are Considering Building a New City Park

question 100

Multiple Choice

Citizens of Tinytown are considering building a new city park.If each voter in Tinytown has a reservation price that is less than the total cost of the park,then

• A)by definition,the benefits of the park are less than the costs and thus the park should not be built.
• B)some sort of collective action by voters will be necessary to fund the park.
• C)a private firm will have an incentive to build the park.
• D)the park will never be built.

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Definitions:

Break-even Point

A stage where total sales or production volume exactly matches the overall expenses, consequently yielding no financial gain or deficit.

Break-even Point

The financial stage where total costs equal total revenue, meaning the business is neither making a profit nor a loss.

Unit Variable Costs

Costs that vary directly with the production volume, per unit produced.

Break-even Point

The breakpoint where overall earnings from sales or manufacturing activities are equal to the total costs incurred, preventing any profit or loss.