Question

23.24

Exhibit 9.7 s/a 700 810 884 976 1,000 o/t 23. Refer to Exhibit 9.7, which shows the cost and revenue curves for a monopolist. The output level that is most likely to achieve allocative efficiency in this market is a. 700 units. b. 810 units. c. 884 units. d. 976 units. e. 1,000 units. 24. In resource markets, a. firms demand the resources that maximize profit. b. firms demand the resources that minimize profit. c. firms supply the resources that maximize utility. d. firms supply the resources that minimize utility. e. firms and profit are not related.

Answer 1

For allocative efficiency, the firms produce at the point where P = MC. At that point quantity produced = 884 units

Option C is correct.

In resource market, the firms are the demanders. They demand resources that maximise the profit as maximising profit is the main objective of the firms. Therefore the correct option is a)