Which of the Following Statements Is Correct

question 149

Multiple Choice

Which of the following statements is correct?

• A)The benefits that accrue to a monopoly's owners are equal to the costs that are incurred by consumers of that firm's product.
• B)The deadweight loss that arises in monopoly stems from the fact that the profit-maximizing monopoly firm produces a quantity of output that exceeds the socially-efficient quantity.
• C)The deadweight loss caused by monopoly is similar to the deadweight loss caused by a tax on a product.
• D)The primary social problem caused by monopoly is monopoly profit.

Understand the components involved in preparing a Direct Materials Purchase Budget.

Calculate the desired ending inventory for materials required in production.

Determine the budgeted direct labor cost per unit for products.

Calculate total material costs based on production needs and material cost per yard or kilogram.