« previous next »

Author Question: How does competition ensure that the efficient product mix is attained? What will be an ideal ... (Read 79 times)

mspears3

  • Hero Member
  • *****
  • Posts: 586
on: Jul 1, 2018
How does competition ensure that the efficient product mix is attained?
 
  What will be an ideal response?

Question 2

The long-run average cost curve may initially slope downward due to
 
  A) decreasing average fixed costs.
  B) increasing marginal returns.
  C) economies of scale.
  D) All of the above.
Microeconomics ¦ Perloff ¦ 8th Edition
Buy Test-Bank


canderson530

  • Sr. Member
  • ****
  • Posts: 317
Reply #1 on: Jul 1, 2018
Answer to Question 1

In a competitive market, producers choose an output level where marginal cost equals price. Thus, Px/Py = MCx/MCy. Each consumer maximizes her own utility subject to the given prices by setting MUx/MUy = px/py. Even though each is acting independently and in her own interest, the final outcome is that px/py = MRS = MRT, which is the condition for efficient product mix.

Answer to Question 2

C


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Eat fiber! A diet high in fiber can help lower cholesterol levels by as much as 10%.

Did you know?

A cataract is a clouding of the eyes' natural lens. As we age, some clouding of the lens may occur. The first sign of a cataract is usually blurry vision. Although glasses and other visual aids may at first help a person with cataracts, surgery may become inevitable. Cataract surgery is very successful in restoring vision, and it is the most frequently performed surgery in the United States.

Did you know?

Over time, chronic hepatitis B virus and hepatitis C virus infections can progress to advanced liver disease, liver failure, and hepatocellular carcinoma. Unlike other forms, more than 80% of hepatitis C infections become chronic and lead to liver disease. When combined with hepatitis B, hepatitis C now accounts for 75% percent of all cases of liver disease around the world. Liver failure caused by hepatitis C is now leading cause of liver transplants in the United States.

Did you know?

Approximately 70% of expectant mothers report experiencing some symptoms of morning sickness during the first trimester of pregnancy.

Did you know?

The average adult has about 21 square feet of skin.

A stallion with a proven competition record is one criterion for being a suitable sire. A stallion with a proven competition record is one criterion for being a suitable sire.
After excavation, recovered remains are screened to ensure that even tiny fragments are retrieved an After excavation, recovered remains are screened to ensure that even tiny fragments are retrieved an
The human eye, a product of 600 million years of evolution (Lamb, Collin, & Pugh, 2007). The human eye, a product of 600 million years of evolution (Lamb, Collin, & Pugh, 2007).
To find the derivative use product rule To find the derivative use product rule
For the circuit in Figure 1, assume ideal diodes. The peak inverse voltage is approximately For the circuit in Figure 1, assume ideal diodes. The peak inverse voltage is approximately
Interference Competition Interference Competition
Video: Kidney Stones

For a complete list of videos, visit our video library