Which of the Following Statements Is True

question 13

Multiple Choice

Which of the following statements is true?

• A)As a consequence of the monopoly firm producing the quantity of output at which price equals marginal cost, it is resource allocative efficient.
• B)As a consequence of the perfectly competitive firm producing the quantity of output at which price equals marginal cost, it is resource allocative efficient.
• C)a and b
• D)none of the above

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Definitions:

Continuously Compounded

A method of calculating interest where earnings are immediately reinvested, leading to exponential growth of the investment over time.

Risk-free Rate

The theoretical return on investment of an absolutely risk-free asset, often represented by the yield on government securities.

Pure Discount Debt

A type of debt instrument that is issued at a discount to its face value, pays no interest, and is redeemed at its full face value at maturity.

Risk-free Rate

The theoretical rate of return of an investment with zero risk, typically associated with government bonds.