Asked by
Nelly Montes
on Nov 27, 2024
Verified
If a purely competitive firm is producing where price exceeds marginal cost, then
A) the firm will fail to maximize profit, but resources will be efficiently allocated.
B) the firm will fail to maximize profit and resources will be overallocated to the product.
C) the firm will fail to maximize profit and resources will be underallocated to the product.
D) resources will be underallocated to the product, but the firm will maximize profit.
Marginal Cost
The cost implicated in generating an added unit of a product or service.
Efficient Allocation
The distribution of resources in a way that maximizes the net benefit received by an economy.
- Evaluate the circumstances required for the most economical production and allocation of resources.
- Understand the significance of marginal cost, average total cost, and price in the attainment of productive and allocative efficiency.
Verified Answer
JV
Learning Objectives
- Evaluate the circumstances required for the most economical production and allocation of resources.
- Understand the significance of marginal cost, average total cost, and price in the attainment of productive and allocative efficiency.