If There Is a Market Outcome in Which the Marginal

question 105

Multiple Choice

If there is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and consumer surplus plus producer surplus is maximised, then

• A)maximum deadweight loss occurs.
• B)economic efficiency is achieved.
• C)profits are maximised.
• D)costs are minimised.

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Definitions:

Accrued Revenue

Revenue that has been earned but not yet received in cash or recorded by the accounting system.

Adjusting

The process of making entries in the accounting records at the end of an accounting period to account for items that were not fully recorded.

Accruals

An accounting practice that documents income and expenditures at the time they happen, irrespective of the timing of the associated cash transactions.

Recorded

The act of documenting transactions, changes, or events in the relevant books or databases for future reference and analysis.