Question

Is a market output that is less than the competitive output efficient (efficient in output)? Explain...

Is a market output that is less than the competitive output efficient (efficient in output)? Explain why or why not. Is a market output that is greater than the competitive output efficient? Explain why or why not.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

A market output which is less than the competitive output is not efficient because at the competitive output price is equal to marginal cost of production where total surplus in the economy is maximized. There is no deadweight loss in the economy when output is produced equal to the marginal cost.

A market output which is greater than the competitive output is not possible in the economy because at more than the efficient level of output in the economy, marginal cost of the firm exceeds the marginal revenue from selling the product and no firm will incur losses to produce at the level of output where is greater than the efficient level of output in the economy.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The contract curve represents options for a union contract that are A. Less efficient than the...
The contract curve represents options for a union contract that are A. Less efficient than the union's preferred wage. B. At a wage lower than the competitive market wage. C. More efficient than the union's preferred wage. D. Associated with levels of employment above the competitive level.
Explain why only a competitive and well-behaved market can guarantee an efficient outcome. In your answer...
Explain why only a competitive and well-behaved market can guarantee an efficient outcome. In your answer discuss three factors that undermine a market’s ability to guarantee an efficient outcome.
.Using a graph, explain why a competitive market in which the price is lower than the...
.Using a graph, explain why a competitive market in which the price is lower than the market equilibrium is not Pareto efficient. (You can draw the graph, take a picture and attach it here. Please do *not* take a picture of your hand-written answer, it is much easier for your marker to read typed text)
1. Why is output different for a monopolist than for a firm in a perfectly competitive...
1. Why is output different for a monopolist than for a firm in a perfectly competitive market? 2. Can a monopolist set both price and quantity? Explain. Thank you!
Briefly explain why a monopoly is not socially optimal or allocatively efficient compared to a competitive...
Briefly explain why a monopoly is not socially optimal or allocatively efficient compared to a competitive market structure.
Private supply of public goods is most likely to result in less than the efficient level...
Private supply of public goods is most likely to result in less than the efficient level of output, due to the free-rider problem less than the efficient level of output, due to the problem of insufficient competition more than the efficient level of output, due to lower costs of private firms more than the efficient level of output, due to the existence of externalities an overuse of these goods.
Although a competitive equilibrium is always Pareto efficient, a Pareto efficient outcome is not necessarily a...
Although a competitive equilibrium is always Pareto efficient, a Pareto efficient outcome is not necessarily a competitive equilibrium. Explain. (It is sufficient to give an example of a Pareto efficient outcome that is not a competitive equilibrium and explain why it is not.)
1. In a perfectly competitive market a firm should be increasing the output when a. marginal...
1. In a perfectly competitive market a firm should be increasing the output when a. marginal revenue is less than marginal cost. b. there are enough customers. c. marginal revenue is greater than marginal cost. d. marginal revenue is equal to marginal cost. 2. All firms operating in a perfectly competitive market produce unique goods. a.True b. False 3. In perfect competition marginal revenue is equal to price. a.True b.False 4.In perfectly competitive market the slope of marginal revenue curve...
Question 2 (a) Should the government intervene in efficient competitive market equilibrium?      Explain.                      &n
Question 2 (a) Should the government intervene in efficient competitive market equilibrium?      Explain.                                                                                                                                 [4 marks] (b) Comment on the outcomes of a price floor policy if the government were to impose      such a policy.                                                                                                                                 [6 marks]
Why is a cooling device less efficient than a heat engine?
Why is a cooling device less efficient than a heat engine?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT