Suppose that there are external benefits in an otherwise perfectly competitive market. The market will produce ______________ the allocatively efficient level of output.Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.amore thanbless thancan amount equal todeither an amount equal to or an amount more than
Question
Suppose that there are external benefits in an otherwise perfectly competitive market. The market will produce ______________ the allocatively efficient level of output.Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.amore thanbless thancan amount equal todeither an amount equal to or an amount more than
Solution
The correct answer is "bless than".
In a perfectly competitive market, firms only consider their private costs and benefits when deciding how much to produce. They do not take into account the external benefits that their production may provide to others. As a result, the market will produce less than the allocatively efficient level of output, which would take into account both private and external benefits.
Similar Questions
Consider a good produced in a competitive market, but one with external benefits. The market price will result in too ______________ of the good for economic efficiency. The market price will be ______________ than the price that would convince producers to produce the efficient amount.Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.alittle; lowerblittle; highercmuch; lowerdmuch; higher
The efficient amount of production in a competitive market with external benefits is greater than the equilibrium market quantity.Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.aTruebFalse
Suppose a commodity is sold in perfectly competitive markets. If the market price of the commodity falls, each individual firm will produce ________ output and will experience ________ profits.Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.ahigher; higherbhigher; lowerclower; higherdlower; lower
In the long run, a monopolist facing the same cost curves as a perfectly competitive firm will charge a ______________ price than the competitive market and produce a ______________ output.Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.alower; higherblower; lowerchigher; higherdhigher; lower
If a monopoly increased the price above the profit maximizing level, __________.Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.amarginal revenue would decreasebtotal revenue would decreaseYour answercprofits would increasedprofits would be unchanged
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.