Refer to the Above Supply and Demand Graph for a Public

question 3

Multiple Choice

Refer to the above supply and demand graph for a public good.Line segment ad represents the amount at Q₁ by which the:

• A) marginal benefit of this public good is less than the marginal cost.
• B) total benefit of this public good is less than the total cost.
• C) marginal benefit of this public good is greater than the marginal cost.
• D) total benefit of this public good is greater than the total cost.

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Definitions:

Barriers to Entry

Barriers that make it difficult for new entrants to join a market due to financial, legal, or procedural hurdles.

Economic Profit

The distinction in totality between incomes and costs, inclusive of both transparent and concealed expenses.

Long Run

A period in economics where all factors of production and costs are variable, allowing for full industry adjustment.

Economies of Scale

Economies of Scale refer to the cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.