Excess capacity is a characteristic of monopolistically competitive firms. What does excess capacity mean?
A) It means that firms hire more than the minimum number of workers needed to produce the profit-maximizing level of output.
B) It means that firms build plants that are not large enough to achieve minimum efficient scale.
C) It means that firms do not produce the output level that corresponds to the minimum point on their average total cost curves.
D) It means that firms produce with inefficient combinations of resources.
C
You might also like to view...
The "equality of opportunity" idea of fairness claims
A) a society should make the poorest as well off as possible. B) the results and the rules should both be fair. C) it's not fair if the rules aren't fair. D) private property can be transferred under government order. E) only a first-come, first-served system of allocating resources is fair.
A fixed-weight price index provides less accurate changes than a chain-weighted system
a. True b. False Indicate whether the statement is true or false
Both countries can benefit from trade when:
A. at least one country produces the good for which it has an absolute advantage. B. each specializes in producing the good for which it has a comparative advantage. C. each specializes in producing the good for which it has an absolute advantage. D. there are no trade barriers that are erected by either country.
Human capital refers to the:
A. skills, experience, and natural talent that determine the productivity of workers. B. amount of people a firm has access to for production. C. production per capita. D. the machinery and tools that labor can use for production.