Which of the following statements is correct, for sure? A. Perfect competition always leads to allocative...
Which of the following statements is correct, for sure?
A. Perfect competition always leads to allocative efficiency.
B. Monopoly power always results in allocative inefficiency.
C. A negative production externality always results in allocative inefficiency.
D. A positive consumption externality always results in allocative efficiency.
E. None of the above.
Homework Answers
Option A
Perfect competition is an Ideal situation where suppliers and buyers have complete information of price and quality of goods. The market operates on supply and demand forces which results in MC = MR and hence the input resources and goods produced get allocated efficiently.
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Which of the following statements is correct, for sure?
A. Perfect competition always leads to allocative...
Perfect competition results in productive efficiency and allocative efficiency, while monopolistic competition results in ________. a....
Perfect competition results in productive efficiency and allocative efficiency, while monopolistic competition results in ________. a. both allocative and productive efficiency b. allocative efficiency, but not productive efficiency c. productive efficiency, but not allocative efficiency d. neither allocative nor productive efficiency
(Figure 9.9) Which of the following statements is TRUE? I. Consumer surplus under perfect competition is...
(Figure 9.9) Which of the following statements is TRUE?
I.
Consumer surplus under perfect competition is given by area
A + B + C.
II.
Producer surplus under monopoly is given by area B +
D.
III.
The deadweight loss from market power is area C.
Question 71 1p Which of the following is a positive (rather than negative) outcome of the...
Question 71 1p Which of the following is a positive (rather than negative) outcome of the monopoly market structure? Consumers pay a higher price than they would under perfect competition Firms may take advantage of economies of scale. Rent seeking behavior is likely to occur. Productive and allocative inefficiency occur due to this market structure
In perfect competition as well as in monopolistic competition, a. profit is positive in a long-run...
In perfect competition as well as in monopolistic competition, a. profit is positive in a long-run equilibrium for each firm. b.entry and exit by firms are restricted. c. there are many firms in a single market. d. marginal revenue is equal to price for each firm. ECTION 22 Monopolistic competition differs from perfect competition because in monopolistically competitive markets a. all firms can eventually earn economic profits. b. each of the sellers offers a somewhat different product. C. strategic interactions...
1. For each of the following situations draw the Demand and Supply for a competitive market....
1. For each of the following situations draw the Demand and Supply for a competitive market. Show the Social Marginal Benefit and Social Marginal Cost curves and explain whether the presence of the externality leads to a competitive market equilibrium with too much or too little production relative to the socially optimal outcome. (a) A negative externality associated with production. (b) A negative externality associated with consumption (c) A positive externality associated with consumption. 2. Consider a downward-sloping market demand...
Which of the following is not a type of market structure? A. monopolistic competition. B. perfect...
Which of the following is not a type of market structure? A. monopolistic competition. B. perfect competition. C. monopolistic oligopoly. D. monopoly
Perfect Competition Progress You are on question 10 of 10 Which of the following statements are...
Perfect Competition Progress You are on question 10 of 10 Which of the following statements are correct? O Perfect competition guarantees that all market participants have equal access to all goods and services produced by an economy. Perfect competition guarantees equality of well- being among a country's citizens. O Perfect competition guarantees that prices charged for goods exactly reflect the marginal cost of producing them.
Which of the following industries might be classified in pure or perfect competition? O A. restaurants...
Which of the following industries might be classified in pure or perfect competition? O A. restaurants O B. software design O C. automobile manufacturing O D. all of the above O E. none of the above
Which of the following statements is (are) correct? (x) An externality is the uncompensated impact of...
Which of the following statements is (are) correct? (x) An externality is the uncompensated impact of one person’s actions on the well-being of a bystander. (y) An example of an externality that causes market failure is the case of a copper refinery that does not bear the entire cost of the smoke it emits. (z) If an externality, such as air or water pollution, is present in a market, economic efficiency may be enhanced by government intervention that reduces the...
2. Consider a downward-sloping market demand and an upward-sloping marginal cost. For each of the following...
2. Consider a downward-sloping market demand and an upward-sloping marginal cost. For each of the following situations, show the Social Marginal Benefit and Social Marginal Cost curves and explain whether the presence of the externality leads to a monopoly equilibrium with too much or too little production relative to the socially optimal outcome. (a) A negative externality associated with production (b) A negative externality associated with consumption (c) A positive externality associated with consumption.
(Figure 9.9) Which of the following statements is TRUE?
I.
Consumer surplus under perfect competition is given by area
A + B + C.
II.
Producer surplus under monopoly is given by area B +
D.
III.
The deadweight loss from market power is area C.
Question 71 1p Which of the following is a positive (rather than negative) outcome of the monopoly market structure? Consumers pay a higher price than they would under perfect competition Firms may take advantage of economies of scale. Rent seeking behavior is likely to occur. Productive and allocative inefficiency occur due to this market structure
In perfect competition as well as in monopolistic competition, a. profit is positive in a long-run equilibrium for each firm. b.entry and exit by firms are restricted. c. there are many firms in a single market. d. marginal revenue is equal to price for each firm. ECTION 22 Monopolistic competition differs from perfect competition because in monopolistically competitive markets a. all firms can eventually earn economic profits. b. each of the sellers offers a somewhat different product. C. strategic interactions...
1. For each of the following situations draw the Demand and Supply for a competitive market. Show the Social Marginal Benefit and Social Marginal Cost curves and explain whether the presence of the externality leads to a competitive market equilibrium with too much or too little production relative to the socially optimal outcome. (a) A negative externality associated with production. (b) A negative externality associated with consumption (c) A positive externality associated with consumption. 2. Consider a downward-sloping market demand...
Perfect Competition Progress You are on question 10 of 10 Which of the following statements are correct? O Perfect competition guarantees that all market participants have equal access to all goods and services produced by an economy. Perfect competition guarantees equality of well- being among a country's citizens. O Perfect competition guarantees that prices charged for goods exactly reflect the marginal cost of producing them.
Which of the following industries might be classified in pure or perfect competition? O A. restaurants O B. software design O C. automobile manufacturing O D. all of the above O E. none of the above
2. Consider a downward-sloping market demand and an upward-sloping marginal cost. For each of the following situations, show the Social Marginal Benefit and Social Marginal Cost curves and explain whether the presence of the externality leads to a monopoly equilibrium with too much or too little production relative to the socially optimal outcome. (a) A negative externality associated with production (b) A negative externality associated with consumption (c) A positive externality associated with consumption.
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