Perfect competition is the one industry structure that achieves all of the following:
- productive efficiency
- allocative efficiency
- maximizes social welfare
Select one of the achievements of the perfect competition listed above. Describe what it means in your own words, and state why you believe it to be the most important standard.
|
Perfect competition is the one industry structure that achieves all of the following: - productive efficiency - allocative efficiency - maximizes social welfare Select one of the achievements of the perfect competition listed above. Describe what it means in your own words, and state why you believe it to be the most important standard. |
Answer verification
Related textbook solutions
Related questions
21)
Compared to the results in a perfectly competitive market, a monopoly does which of the following?
|
It charges a higher price. |
|
|
It charges a price greater than the marginal cost. |
|
|
It produces less output. |
|
|
All of the above |
|
|
None of the above |
22)
"X-inefficiency" refers to the idea that
|
government restrictions on competition create a monopoly, which results in inefficiency. |
|
|
the cost of rent-seeking activity should be added to the welfare cost of monopoly. |
|
|
Generation X is less efficient due to a lack of competitive spirit. |
|
|
a lack of competitive pressure results in a monopoly not keeping its costs down to the lowest possible level. |
|
|
price discrimination results in inefficiently low cross-elasticities of demand. |
23)
Firms in which of the following market structures can engage in price discrimination?
|
monopoly |
|
|
oligopoly |
|
|
monopolistic competition |
|
|
All of the above |
|
|
None of the above |
24)
Monopolistic competition and perfect competition are in all of the following ways except
|
Barriers to entry are low in both |
|
|
There are many firms in both |
|
|
Firms in both produce the output level where MR=MC |
|
|
Nonprice competition is important in both |
25)
To get rid of excess capacity from the monopolistic competition in the long run, what would have to be given up?
|
Free entry and exit. |
|
|
economic rent |
|
|
resource allocative efficiency |
|
|
differentiated product |
|
|
productive efficiency |
