Question

Question Completion Status: QUESTION 21 When do new firms tend to enter a competitive industry When the large firms in the industry are earning zero profit when the smaller firms are leaving the industry when the new entrants can earn positive profits when there is an absence of fixed costs in the long run QUESTION 22 Marginal cost can be expressed as the ratio of the price of labor and the marginal product of labor only when labor is held constant only when labor is the only variable input whether labor is held constant or not never QUESTION 23 Private markets tend to undersupply nonexcludable goods because individual incentives to be untruthful overcrowding free riding dissipated rents QUESTION 24 A market failure occurs when shortages or surpluses of some good cannot be eliminated private markets cannot provide a good in socially efficient quantities consumer surplus falls to zero property is privately owned and people behave competitively QUESTION 25 Frequently, a public good can be adequately provided by private action when its benefits are concentrated among a small number of people equally valued by everyone widespread greater than its costs

Answer 1

Answer: new firms tend to enden a competitive industry when new entrands can earn positive profits, option ② is correct. 22 Tc = wltok 22 imca fixed w TC= WL trk (mC = w/mp) K only when the labour is only Variable cost. option (B) (23) Private markets tend to under supply non excludability non-excludable good because of the problem of free-riding option 6 A market failure occurs when the mechanism fails to account for the costs and benefits necessary and consume a good. price all of to provide