How Would Many Economists View Inefficiency in Oligopoly

question 179

Multiple Choice

How would many economists view inefficiency in oligopoly?

• A) P > MC and P = minimum ATC
• B) P = MC and P > minimum ATC
• C) P = MC and P = minimum ATC
• D) P > MC and P > minimum ATC

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Definitions:

Implicit Costs

Costs that represent the opportunity costs of using resources owned by the firm for its own production rather than selling those resources.

Economic Profit

The difference between total revenue and the total cost of inputs (including opportunity costs), reflecting the additional gain from business operations beyond breaking even.

Economic Loss

The decrease in financial value or resources due to an event, action, or inaction, encompassing factors such as direct, indirect, and opportunity costs.

Production Costs

Expenses directly related to the creation and manufacturing of a product, including raw materials, labor, and overhead.