A Monopolistically Competitive Market Could Be Considered Inefficient Because

question 106

Multiple Choice

A monopolistically competitive market could be considered inefficient because

• A)marginal revenue exceeds average revenue.
• B)price exceeds marginal cost.
• C)the efficient scale of production is only achieved in the long run, not in the short run.
• D)markup pricing does not occur in any other market structure.

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Definitions:

Resource Suppliers

Entities or individuals that provide essential inputs or resources required for production processes across various industries.

Insurable Risk

A risk that meets the criteria for insurance coverage, typically being unforeseeable, accidental, and quantifiable in terms of loss.

Consumer Tastes

Preferences and desires that influence the buying behavior of consumers and demand for products and services.

Economic Profits

The surplus achieved when total revenue exceeds the total costs, including both explicit and implicit costs.