It has been argued that a monopolistically competitive industry involves "waste" because

A. they end up producing to the right of the minimum of the average total cost curve and the price is below the marginal cost.
B. the firms do not equate marginal cost to marginal revenue to find the profit maximizing price and output.
C. there is too much product differentiation making shelves too crowded.
D. the firms do not produce at the minimum of the average total cost curve and price is above marginal cost.


Answer: D

Economics

You might also like to view...

If an economy produces 2,000 units of output with a price level of $2 and the money supply (M) is $1,000, velocity is:

A. 4. B. 500. C. 1. D. 2.

Economics

Which of the following is not an example of a resource?

a. an office building b. a product's price c. the land plowed by a farmer in order to grow corn d. the chief executive officer of a large corporation

Economics

Suppose that a federal election is coming soon and the government has been running persistent large budget deficits. Constitutional economists would most likely urge ___________________ in order to eliminate future budget deficits

A) voters to vote for liberal candidates B) voters to vote for conservative candidates C) Congress to pass a law constraining them to spend no more than what they are receiving in tax revenues D) Congress to remove all constraints on spending and taxes.

Economics

The maximum amount of increase in the money supply that can be caused by an increase in excess reserves is equal to the

A) deposit multiplier ´ the required reserve ratio. B) loan multiplier ´ the change in excess reserves. C) deposit multiplier ÷ the change in excess reserves. D) deposit multiplier ´ the change in excess reserves.

Economics