Define the efficient scale of production. For the situation of a firm in monopolistic competition, discuss its excess capacity
What will be an ideal response?
The efficient scale is the quantity produced when average total cost is at its minimum. In the long run, a firm in monopolistic competition operates below the efficient scale when maximizing profits. The difference between the efficient scale and the quantity produced by a firm is the excess capacity. Because the firm is not producing at the efficient scale, its average total cost is higher than if it produced at the efficient scale.
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If Karen gets up early and studies three hours for her test, she is likely to get an A. If she sleeps in, she will probably get a C. What is the opportunity cost of sleeping in?
(A) Three additional hours of study. (B) a C. (C) An A. (D) Three additional hours of sleep.
Nonsmoking sections in restaurants are designed to remove ____ from a market ____
a. smoke; with food service b. third parties; for food service c. externalities; with public goods d. third parties; externality e. nonsmokers; for food service