The economic surplus of an action is:
A. the difference between the explicit and implicit costs of taking an action.
B. the money a person has left over after taking an action.
C. the difference between the benefit and the cost of taking an action.
D. the benefit gained by taking an action.
Answer: C
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Economists agree that a monopolistically competitive market structure
A) can eliminate any excess capacity if all firms in the industry devote more funds to differentiating their products. B) lowers consumer utility because consumers pay a price higher than the marginal cost of production. C) is detrimental to society because it leads to a waste of scarce resources. D) benefits consumers because firms produce products that appeal to a wide range of consumer tastes.
A firm that sells at a price below average cost is losing money.
Answer the following statement true (T) or false (F)