Author Question: Refer to Figure 4-8. What is the value of consumer surplus after the imposition of the ceiling? ... (Read 116 times)

HudsonKB16 · **on:** Jun 29, 2018

Refer to Figure 4-8. What is the value of consumer surplus after the imposition of the ceiling?

A) 120,000 B) 230,000 C) 270,000 D) 430,000

Question 2

How does marginal cost change as output increases (a) initially and (b) eventually?

What will be an ideal response?

ong527 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

B

Answer to Question 2

At small outputs, marginal cost decreases as output increases because of greater specialization and the division of labor, but as output increases further, marginal cost eventually increases because of the law of diminishing returns.