-In the Figure Above, Assuming That the Firm Does Not

question 127

Multiple Choice

-In the figure above, assuming that the firm does not shut down, it will charge a price of

• A) $2.
• B) $4.
• C) $1.
• D) $3.

---

Definitions:

Market Failure

A situation in which the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss.

Market Inequalities

Disparities that exist within the economic market system, often reflecting differences in wealth, income, and access to resources.

Opportunity Cost

The forgone benefit that would have been derived by an option not chosen.

Next-best Activity

The alternative that must be forgone to engage in a particular activity, representing the opportunity cost of that decision.