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Author Question: The deadweight loss represents the sum of additional consumer and producer surplus should the firm ... (Read 74 times)

bio_gurl

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on: Jul 1, 2018
The deadweight loss represents the sum of additional consumer and producer surplus should the firm produce the quantity where P = MC rather than where MR = MC.
 
  Indicate whether the statement is true or false

Question 2

If a competitive firm is in short-run equilibrium, then
 
  A) profits equal zero.
  B) it will not operate at a loss.
  C) an increase in its fixed cost will have no effect on profit.
  D) an increase in its fixed cost will have no effect on output.


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triiciiaa

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Reply #1 on: Jul 1, 2018
Answer to Question 1

True . If P = MC is produced, quantity increases, and the deadweight loss is turned into more CS and PS. This will increase total welfare.

Answer to Question 2

D


bio_gurl

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Reply 2 on: Jul 1, 2018
Great answer, keep it coming :)

Laurenleakan

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Reply 3 on: Yesterday
Excellent

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