QuizMaster

X inefficiency occurs when ?

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X inefficiency occurs when ?

A. The price is greater than the marginal cost
B. The price is greater than the average cost
C. Costs are higher than they could be due to a lack of competitive pressure
D. There are external cost

Which of the following is not put forth as a criticism of advertising and brand names ?

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Which of the following is not put forth as a criticism of advertising and brand names ?

A. Advertising manipulates people’s tastes to create a desire that otherwise would not exist
B. Advertising increase competition Which causes unnecessary bankruptcies and layoffs.
C. Advertising increases brand loyalty causes demand to be more inelastic and thus, increase mark-up over marginal cost.
All of these answers are criticisms of advertising and brand names

Which of the following firms is most likely to spend a large percentage of their revenue on advertising ?

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Which of the following firms is most likely to spend a large percentage of their revenue on advertising ?

A. the producer of a highly differentiated consumer product
B. the manufacturer of an undifferentiated consumer commodity
C. a perfect competitor
D. The manufacturer of an industrial product
E. The producer of a low-quality product that costs the same to produce as a similar high-quality product

The use of word “competition” in the name of the market structure called “monopolistic competition” refers to the fact that ?

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The use of word “competition” in the name of the market structure called “monopolistic competition” refers to the fact that ?

A. there are many sellers in a monopolistically competitive market and there is free entry and exit in the market just like a competitive market
B. Monopolistically competitive firms face a downward-slog demand curve just like competitive firms.
C. Monopolistically competitive firms charge prices equal to the minimum of their average total cost just like competitive firms.
D. The products are differentiated in a monopolistically competitive market just like in a competitive market.

One source of inefficiency in monopolistic competition is that since price is above marginal cost, some units are not produced that buyers value in ?

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One source of inefficiency in monopolistic competition is that since price is above marginal cost, some units are not produced that buyers value in ?

A. Since price is above marginal cost surplus is redistributed from buyers to sellers
B. monopolistically competitive firms earn economic profits in the long run
C. monopolistically competitive firms produce beyond their efficient scale
D. excess of the cost of production and this causes a deadweight loss.