Why do economists consider perfect competition to be the most efficient market structure?
What will be an ideal response?
Perfect competition is the most efficient market structure because, in the long run, each firm in the market will be producing at its minimum average cost, or per-unit cost (see Figure 10-9a in the text, for example). This means that consumers get desired goods and services at the lowest possible prices, and also that the firms are economizing on society's scarce resources to the greatest extent possible.
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A gaming strategy in which one player states that he/she would break the agreement for eternity if his/her co-player breaks the agreement once is called:
a. a grim trigger. b. a credible threat. c. a chain-store paradox. d. a dominance pull.
Which of the following is NOT true about investment goods?
A.) They add to the nation's stock of capital. B.) They can be used to replace worn-out equipment. C.) They can expand the nation's production possibilities. D.)They increase the retirement benefits for individuals.
The marginal utility of his third action figure would be
Table-Demand and Utility Table for action figures
A. $10.
B. $12.
C. $14.
D. $36.
Official unemployment rates may underestimate the true rate of unemployment because the official rate
A) fails to include discouraged workers. B) does not include individuals receiving any type of unemployment compensation. C) may include some individuals who are not actually in the labor force. D) includes those workers who only work part time.