A competitive market maximizes social welfare because in a competitive market,
A) profits are zero.
B) price equals marginal cost of the last unit produced.
C) price equals average cost of the last unit produced.
D) there is free entry and exit.
B
Economics
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Refer to the diagram. Arrows (1) and (2) represent:
A. goods and resources respectively.
B. money incomes and output respectively.
C. output and money incomes respectively.
D. resources and goods respectively.
Economics
As market price increases in the short run, a profit-maximizing firm in a perfectly competitive market will expand output along its:
A. marginal cost curve. B. average total cost curve. C. average variable cost curve. D. market demand curve.
Economics