At the college level there is complete school choice

When marginal cost pricing occurs

A) price equals the additional cost society incurs in producing the next unit of an item. B) the firm can only break even if it does not set price to marginal cost. C) price equals average variable cost but exceeds average total cost. D) the firm is at the shutdown point.

Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss As shown in Exhibit 3A-2, if the market price falls from P2 to P3, then:

A. total surplus increases. B. deadweight loss decreases. C. overproduction increases. D. underproduction decreases.