Suppose That an Economy Wants to Eliminate the Resource Waste

question 53

Multiple Choice

Suppose that an economy wants to eliminate the resource waste associated with excess capacity in monopolistically competitive markets.Which of the following would achieve this goal?

• A)Firms are allowed to establish significant barriers to entry.
• B)Firms are encouraged to produce less output.
• C)Firms are required to set price equal to marginal cost.
• D)Firms are required to charge the same price.

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Definitions:

Income Taxes

Taxes levied by governments on the income earned by entities (individuals or corporations), with rates varying by income level.

Part-time Basis

Refers to employment where the worker is not working full-time and usually works fewer hours.

Form W-2

An IRS tax form used in the United States to report wages paid to employees and the taxes withheld from them.

Gross Wages

The total amount of money earned by an employee before any deductions or taxes are taken out.