Refer to the Diagrams

question 343

Multiple Choice

Refer to the diagrams. With the industry structures represented by diagram

• A)(A), there will be only a normal profit in the long run, while in (B)an economic profit can persist.
• B)(A), price exceeds marginal cost, resulting in allocative inefficiency.
• B), price equals marginal cost, resulting in allocative efficiency.
• B), equilibrium price and quantity will be e and h, respectively.

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Definitions:

Labour Costs

The total expense incurred by an employer for the salaries, wages, and benefits of its employees.

Employee Leasing

A practice where businesses hire their workers through a third-party, transferring the administrative responsibility of employees, such as payroll and benefits, to the leasing firm.

Outsourcing

The practice of hiring external companies or individuals to perform tasks, handle operations or provide services that are either difficult to manage or are outside the business's core competencies.

Offshoring

The practice of relocating business processes or services to another country, often to take advantage of lower labor costs or favorable regulatory environments.