Excess capacity is a characteristic of monopolistically competitive firms. What does excess capacity mean?
A) It means that firms do not produce the output level that corresponds to the minimum point on their average total cost curves.
B) It means that firms hire more than the minimum number of workers needed to produce the profit-maximizing level of output.
C) It means that firms produce with inefficient combinations of resources.
D) It means that firms build plants that are not large enough to achieve minimum efficient scale.
Answer: A
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A financial innovation that developed as a result of banks avoidance of bank branching restrictions was
A) money market mutual funds. B) commercial paper. C) junk bonds. D) bank holding companies.
Refer to the given figure and assumptions. The equilibrium wage and level of employment are, respectively:
Assumptions: (1) Employers in this market are willing and able to ignore minimum wage laws; (2) S d represents the supply of domestic-born (and legal immigrant) workers; (3) S t represents
the total supply of workers in this labor market (S d plus illegal immigrants); and (4) unless otherwise stated, illegal immigration is not effectively blocked by the government.
A. $5.50 and 250,000.
B. $5.50 and 350,000.
C. $8.00 and 350,000.
D. $5.50 and 450,000.