Use the Graph to Answer Questions

question 35

Multiple Choice

Use the graph to answer questions
-Which of the following statements is true?

• A)Price P₂ is optimal and efficient for both the monopolist and the market with perfect competition.
• B)Price P₂ is optimal for the monopolist and socially efficient.
• C)Price P₂ is optimal for the monopolist but is not socially efficient.
• D)Price P₂ is optimal and socially efficient for the market with perfect competition.

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Definitions:

Trade Pattern

A trade pattern refers to the systematic way in which countries engage in international trade, determined by factors like comparative advantage, geographic location, and economic policies.

World Prices

The international market prices of goods and services, influenced by factors such as supply, demand, and trade policies.

Absolute Advantage

The ability of a country, individual, company, or region to produce a good or service at a lower cost per unit than any other production entity.

Comparative Advantage

The ability of an individual or group to carry out a particular economic activity more efficiently than another activity.