Asked by
Calista Litke
on Dec 19, 2024Verified
A monopoly results in productive inefficiency because at the profit-maximizing output level,
A) P > MC.
B) ATC is not at its minimum level.
C) MC is not at its minimum level.
D) P > AVC.
Productive Inefficiency
A situation where resources are not utilized in the best possible way, leading to wasted potential output or higher costs than necessary.
Profit-Maximizing Output
The level of production at which a firm achieves the highest possible profit, determined by the point where marginal revenue equals marginal cost.
Minimum Level
The Minimum Level refers to the least amount, extent, or degree that is acceptable or achievable in a specific context.
- Identify the economic deficits linked to monopolies, such as allocative and productive shortcomings.
Verified Answer
MG
Learning Objectives
- Identify the economic deficits linked to monopolies, such as allocative and productive shortcomings.