Nonprice Competition Results in

question 134

Multiple Choice

Nonprice competition results in

• A)Resource misallocation.
• B)Low entry barriers.
• C)Marginal cost pricing.
• D)Production efficiency.

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Definitions:

Profit-Maximizing Output

The quantity of output at which a firm achieves the maximum possible profit, determined where marginal revenue equals marginal cost.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs.

Perfectly Competitive Firm

A company that operates in a market where there are many buyers and sellers, no barriers to entry or exit, and the firm sells a homogeneous product.

MR

The extra revenue that a firm gains when it sells an additional unit of output, essentially another term for marginal revenue.