Question

Question 23 (1 point) Saved Suppose an economy produces cell phones and GPS devices in perfectly competitive industries. The economy is currently operating at a point on its production possibility frontier. The economy will most likely move to a less-desirable point on the production possibility frontier if more firms enter the GPS device industry. O a single firm gains control over the production of cell phones. more firms enter the cell phone industry. more firms enter both the GPS device industry and the cell phone industry.

Answer 1

Correct Answer:

B

When there is a single firm, gaining control of the production of cell phones, then the firm will produce less of cell phones, while putting the price at the higher level. It will make output combination to be inside of the PPF curve and not on the PPF curve. So, it is a less or non-desirable outcome in the economy.