Question

A string producing plant sells a roll of string for $2.00. The marginal cost to produce each roll of string is $2.00. The firm is operating at allocative efficiency distiributive efficiency .consumer's efficiency productive efficiency

Answer 1

Due to presence of HOMEWORKLIB POLICY, I am answering 4 questions.

1.

Ans: Allocative efficiency

Explanation: With this information, we have P = MC which maximizes total surplus.

3.

Ans: above; positive; positive

Explanation: When P > AC, Profits = (P - AC)Q > 0 and Average profit = Profit / Q > 0.

4.

Ans: a single firm dominates market

Explanation: Single firm market is called a monopoly.

5.

Ans: $20

Explanation: MR = Change in TR / Change in Q = (650 - 450) / (50 - 40) = 200 / 10 = 20.

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