Consider an Industry with Three Profit- Maximizing Firms Producing Identical

question 4

Multiple Choice

Consider an industry with three profit- maximizing firms producing identical soccer jerseys.At their current levels of output,Firm A has a MC of $22,Firm B has a MC of $26,and Firm C has a MC of $27.Each firm is equating price and marginal cost and is operating on their LRAC curve.Which of the following statements is definitely true?

• A)Each firm and the industry are productively efficient.
• B)Each firm and the industry are allocatively efficient.
• C)The industry is productively efficient but each firm is not.
• D)Each firm is productively efficient but the industry is not.
• E)Each firm is allocatively efficient but the industry is not.

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Definitions:

Chance Variation

Random fluctuations in data or characteristics within or across populations due to unpredictable causes.

Gender Stereotypes

Widely held beliefs about the characteristics, attributes, and behaviors deemed appropriate for individuals based solely on their gender.

Accountable

Being responsible for one's actions or decisions, often within a professional context, and facing potential consequences for failures.

Detrimental Effects

Negative impacts or outcomes that arise from a particular action or set of conditions, often leading to harm or disadvantage.