-Refer to Figure 14-1

question 89

Multiple Choice

-Refer to Figure 14-1. The figure above represents the market for pecans. Assume that this is a competitive market. Which of the following is true?

• A) If the price of pecans is $3, the output will be economically efficient but there will be a deadweight loss.
• B) If the price of pecans is $9, consumers will purchase more than the economically efficient output.
• C) Both 4000 pounds and 12 000 pounds are economically inefficient rates of output.
• D) If the price of pecans is $3, producers will sell 12 000 pounds of pecans but this output will be economically inefficient.

Understand and identify the concepts of diminishing marginal returns and marginal cost.

Differentiate between short-run and long-run cost structures and their implications for firm decision-making.

Recognize the relevance and implications of sunk costs and the sunk cost fallacy in economic decision-making.

Interpret diagrams related to cost curves, including total costs, average costs, and marginal costs.

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