When economic losses exist in the cereal market,for example,this is an indication that

Question

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Economic losses mean that the cost of producing cereal is more than the revenue earned from selling it. This indicates that the resources being used to produce cereal could instead be used elsewhere to produce goods and services that are more valuable to society, i.e., have a higher opportunity cost. Thus, choice A is the best answer. Choice B is incorrect because economic losses imply that resources are not being used efficiently. Choice C is also incorrect because the existence of economic losses indicates that there may be too many firms producing cereal, leading to an oversupply and downward pressure on prices.

When Economic Losses Exist in the Cereal Market,for Example,this Is