The Diagram Below Shows the Market Demand Curve and the Cost

question 40

Multiple Choice

The diagram below shows the market demand curve and the cost curves for a single firm. FIGURE 12-6
-Refer to Figure 12-6.Suppose this firm is being regulated using a policy of marginal-cost pricing.In this case,

• A)allocative efficiency is achieved because profits are maximized.
• B)the result is allocatively inefficient because the firm is suffering losses.
• C)the result is allocatively inefficient because the firm is earning profits.
• D)the result is allocatively inefficient because the marginal cost curve lies below the ATC curve.
• E)allocative efficiency is achieved because price equals marginal cost.

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Definitions:

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A hormone and neurotransmitter involved in childbirth and lactation, also known for its roles in social bonding, sexual reproduction, and behaviors such as trust and empathy.

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