Consider an Industry with Three Profit-Maximizing Firms Producing Identical Soccer

question 39

Multiple Choice

Consider an industry with three profit-maximizing firms producing identical soccer jerseys.At their current levels of output,Firm A has a MC of $22,Firm B has a MC of $26,and Firm C has a MC of $27.Each firm is minimizing its costs for its given level of output.Which of the following statements is definitely true?

• A)Each firm and the industry are productively efficient.
• B)Each firm is productively efficient but the industry is not.
• C)The industry is productively efficient but each firm is not.
• D)Each firm is allocatively efficient but the industry is not.
• E)Each firm and the industry are allocatively efficient.

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Definitions:

Main Effects

The immediate effect that an independent variable has on a dependent variable within an experimental setup.

Factorial ANOVA

A statistical analysis used to examine the effects of two or more categorical independent variables on one continuous dependent variable.

T-test

A statistical method employed to evaluate if there's a significant difference between the average values of two distinct groups.

Null Hypotheses

A statement positing that no statistical relation or significance exists in a set of given observations.