Examlex
Which of the following could explain why there is an increase in potential GDP but the equilibrium level of GDP falls?
Allocative Inefficiency
A situation in which resources are not distributed optimally among producers or consumers, leading to a loss in economic efficiency.
Profit-Maximizing Output
The point of production where a company reaches its maximum profit, occurring when marginal cost is equal to marginal revenue.
Marginal Cost
The bump in expenditure for manufacturing an additional unit of a product or service.
Price
The cost in financial terms anticipated, necessitated, or disbursed for something.
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