Which of the Following Is Not Correct

question 2

Multiple Choice

Which of the following is not correct?

• A)Market power can cause markets to be inefficient.
• B)When the decisions of buyers and sellers affect nonparticipants,markets may be inefficient.
• C)The tools of welfare economics cannot help economists when markets are inefficient.
• D)Externalities can cause markets to be inefficient.

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Definitions:

Costs Of Production

The aggregate cost of producing a product or delivering a service, encompassing the price of raw materials, workforce, and indirect expenses.

Industry

A group of firms producing similar products or services that serve the same market.

Profits

The financial gain achieved when the revenue from business activities exceeds the costs and expenses involved in operating.

Market Economy

An economic system where the prices of goods and services are determined in a free price system, set by supply and demand.