Hyperinflation refers to an inflation rate which exceeds 5 percent per month

Refer to Figure 5-5. Suppose the current market equilibrium output of Q1 is not the economically efficient output because of an externality. The economically efficient output is Q2. In that case, diagram shows

A) the effect of an excess demand in a market. B) the effect of a subsidy granted to producers of a good. C) the effect of a positive externality in the consumption of a good. D) the effect of a negative externality in the consumption of a good.

In deciding whether to operate in the short run, the firm must be concerned with the relationship between price of the output and

A) total cost. B) average variable cost. C) total fixed cost. D) the number of buyers.