Use the Following for Questions 55-59

question 71

Multiple Choice

Use the following for questions 55-59.
Exhibit: Marginal Benefit, Marginal Cost, and Net Benefit

-(Exhibit: Marginal Benefit, Marginal Cost, and Net Benefit) In Panel (c) , if activity level is at J, then there will be a deadweight loss of _______ and a net benefit of _______ .

• A) CHI; ABC
• B) ABC; CHI.
• C) CHI; ABC minus CHI.
• D) ABC minus CHI; CHI.

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Definitions:

Market Demand

The aggregate amount of a product or service that every consumer in a market is prepared and capable of buying at different price levels.

Long-Run Equilibrium

A state in which all factors of production and costs are variable, allowing firms to make adjustments and the market to stabilize at a point where supply equals demand.

Monopolistic Competitor

A firm in a market structure where many companies sell products that are similar but not identical.

Short Run

A period of time in economics during which at least one input is fixed and cannot be changed by businesses.