The above figure shows the market for steel ingots. What is the change in externality cost if the market switches from competitive equilibrium to social optimum?
A) a + b
B) b + c
C) c
D) a + b + c
D
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If the market mechanism is efficient, the marginal cost accurately measures the opportunity cost of a good or service
a. True b. False Indicate whether the statement is true or false
A monopolistically competitive firm
a. tries to differentiate its product from competitors' products. b. faces a perfectly elastic demand curve for its product. c. has more monopoly power in the long run than does a perfectly competitive firm. d. is always a retail establishment.
Gross domestic product measures the:
a. wholesale value of all goods and services produced by U.S. owned corporations. b. market value of all final goods and services produced during a year by resources located in the United States. c. initial production value of foreign and Untied States owned corporations who pay taxes in the United States. d. aggregate consumer purchases of goods and services sold in a year in the United States.
In long-run competitive equilibrium it is possible for firm owners to
A. earn both rent and economic profit. B. earn rent but not economic profit. C. earn both economic profit and rent. D. both b and c E. both a and c