When the Activities of One Group or Individual Impose Costs

question 10

True/False

When the activities of one group or individual impose costs on others for which there is no compensation, this is an externality.

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Definitions:

Monopolistic Competition

describes a market structure where many firms sell products that are similar but not identical, leading to competition.

Allocative Efficiency

A state of the economy where resources are allocated in a way that maximizes the overall welfare or utility of consumers.

Average Cost

The total cost divided by the number of goods produced, representing the cost per unit of output.

Long Run

A period of time in economics during which all factors of production and costs are variable, allowing for full adjustment to changes.