The Diagram Below Shows the Market Demand Curve and the Cost

question 72

Multiple Choice

The diagram below shows the market demand curve and the cost curves for a single firm. FIGURE 12-6
-Refer to Figure 12-6.Suppose this firm is being regulated using a policy of average-cost pricing.In this case,

• A)the result is allocatively efficient because economic profits are zero.
• B)the result is allocatively inefficient because price exceeds marginal cost.
• C)the level of output is too low,but the price is allocatively efficient.
• D)the result is as close to the competitive outcome as possible.
• E)the result is allocatively inefficient because the marginal cost curve is downward sloping.

Recognize and explain homology and convergent evolution in the context of mammalian adaptations to aquatic life.

Understand the principles and potential inaccuracies of molecular clocks, particularly in viral evolution.

Identify features indicative of cetacean ancestry in ancient fossils.

Understand the genetic reassortment in viruses and its implications for virulence and pandemic potential.

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Definitions:

Herfindahl Index

A measure of the size of firms in relation to the industry and an indicator of the amount of competition among them, calculated by squaring the market share of each firm within the industry and then summing the total.

Vertical Merger

A merger between two companies that operate at different stages of the production process for a specific product.

Kentucky Fried Chicken

A global fast-food restaurant chain that specializes in fried chicken, commonly known by its acronym KFC.

Vertical Merger

The combination of two or more companies at different stages of production in the same industry.