Use the following to answer question(s) : Correcting for Market Failure: Imperfect Competition
-(Exhibit: Correcting for Market Failure: Imperfect Competition) If the government intervenes to induce the imperfectly competitive firm shown in this exhibit to produce at the efficient level of output of ________ , the change in output would be _______ .
Definitions:
Uncertain Returns
The unpredictability associated with the outcome of an investment or the potential return on an investment.
Economic Profit
The difference between a firm’s total revenues and its total costs, including both explicit and implicit costs, reflecting the true profitability of the firm.
Accounting Profit
The financial gain calculated by subtracting total explicit costs from total revenue.
Perfect Information
A market condition where all participants have access to complete and accurate information concerning all aspects of the market and relevant transactions.
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