Monopolistic competition is an inefficient market structure because
a. price exceeds marginal cost.
b. it has a deadweight loss, just as monopoly does.
c. at the equilibrium, some consumers will value the good at more than the marginal cost of production.
d. All of the above are correct.
d
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Short-run aggregate supply: a. is a fixed volume of output
b. reflects how much RGDP suppliers are willing and able to produce at different price levels. c. shifts only when the LRAS shifts. d. is not affected at all by the price level.
Historically, many cultural groups have outlawed usury, or the practice of levying interest on loans. Some groups oppose usury because it exacerbates problems of income inequality (as wealthier individuals can afford to lend to poorer individuals), while others claim investment and loans should be made charitably. Evaluate these arguments against usury based on your knowledge of present value. Do such prohibitions make sense?
What will be an ideal response?