Evaluate this statement: “A monopolistic ally competitive industry would be more efficient if there were fewer firms.”
What will be an ideal response?
This statement is inaccurate. The inefficiency of a monopolistic ally competitive market results from the fact that firms in the market cannot profitably produce at the output where ATC is minimized. If this were not the case, however, fewer firms would be able to produce the same level of output at a lower price and excess capacity would not result.
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When an import quota is imposed on tomatoes, the price of tomatoes ________ and the quantity bought ________, so domestic consumers ________
A) rises; increases; lose B) rises; decreases; lose C) falls; decreases; lose D) falls; increases; lose E) rises; decreases; gain
Bank reserves increase when the Treasury finances an expenditure through
A) taxation. B) borrowing from the non-bank public. C) borrowing from the banking system. D) borrowing from the Fed.