Table 4-3 -Refer to Table 4-3.The Table Above Lists the Marginal Cost

question 118

Multiple Choice

Table 4-3

-Refer to Table 4-3.The table above lists the marginal cost of polo shirts by Marko's,a firm that specializes in producing men's clothing.If the market price of Marko's polo shirts is $18

• A)Marko's will produce four shirts.
• B)producer surplus from the first shirt is $18.
• C)producer surplus will equal $22.
• D)there will be a surplus; as a result,the price will fall to $7.

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Definitions:

Barrier to Entry

Factors that prevent or hinder companies from entering into a specific market or industry.

Allocative Efficiency

A state of resource allocation where every good or service is produced up to the point where the last unit provides a marginal benefit to consumers equal to the marginal cost of producing it.

Market Power

The ability of a firm or group of firms to manipulate the price or supply of a good or service in the market, often by limiting availability or by altering consumer demand through control of significant portions of the market.

Cartels

associations of independent businesses formed to control production, pricing, and marketing to monopolize a market or restrict competition.