What did Harvard economist Edward Chamberlain say about the observation that a monopolistically competitive firm's average cost of production exceeds its minimum average total cost?
A) Chamberlain argued that these higher costs represent the wastefulness of this market structure.
B) Chamberlain argued that this belief is incorrect. In his view, monopolistically competitive firms do not produce at a cost above their minimum average total costs.
C) According to Chamberlain, this cost difference represents the value consumers place on variety and having more choice.
D) In Chamberlain's view, this is evidence that monopolistic competition uses society's resources inefficiently and in a fashion that merits government intervention.
C
You might also like to view...
Differentiate between an extensive-form game and a simultaneous-move game
What will be an ideal response?
Discuss the advantages of using an income tax system such as the one discussed in this chapter, as opposed to a consumption tax.
What will be an ideal response?
If workers and firms expect increases in future prices, it can lead the short run aggregate supply curve to shift left
a. True b. False Indicate whether the statement is true or false
People who are unemployed because wages are, for some reason, set above the level that brings labor supply and demand into equilibrium are best classified as
a. cyclically unemployed. b. structurally unemployed. c. frictionally unemployed. d. discouraged workers.