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Five-year-old Simone is shown two evenly spaced rows of five nickels.When asked which row has "more," Simone responds that the rows are the same.Next,one of the rows of nickels is squished close together.When asked which has "more," Simone responds the row that is still spaced out has more.In this example,Simone has displayed
Excess Capacity
The failure to produce enough to minimize average total cost; characteristic of monopolistically competitive firms.
Average Total Cost
The total cost of production (fixed plus variable costs) divided by the total quantity produced.
Marginal Cost
This represents the extra expense of manufacturing or producing an additional item, highlighting the concept of decreasing efficiency with increased production volume.
Marginal Revenue
The additional income earned by selling one more unit of a product or service.
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