The oligopolistic industry is not allocatively efficient because
A. the industry produces too little of the good.
B. the industry produces at the lowest marginal cost.
C. the industry produces at the lowest average total cost.
D. the industry produces too much of the good.
Answer: A
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Which of the following costs will not change as output changes?
A) total variable cost B) total fixed cost C) average variable cost D) average fixed cost E) marginal cost
According to real business cycle theory, an increase in financial frictions might lead to ________, if ________
A) a decrease in output; the rise in the credit spread causes a leftward shift of aggregate demand B) a decrease in inflation; the disruption of capital markets results in a leftward shift of long-run aggregate supply C) a decrease in output; the disruption of capital markets results in a leftward shift of long-run aggregate supply D) a decrease in output; a decline in expected output causes a leftward shift of aggregate demand
When an economy is temporarily operating at an output that is beyond its full-employment rate,
a. excess supply in resource markets will eventually lead to lower resource prices, which will decrease costs and direct the economy toward full employment. b. excess demand in resource markets will lead to higher resource prices, which will increase costs and direct the economy toward full employment. c. lower wages and prices will quickly restore full employment. d. only restrictive fiscal policy will direct the economy back to full employment.
Which are not generally considered to be complementary goods?
a. Beef and chicken b. Razors and razor blades c. Gasoline and motor oil d. Beer and pretzels