Chapter 13 Homeworke Consider the diagram below depicting the revenue and cost c

Question

Chapter 13 Homeworke Consider the diagram below depicting the revenue and cost conditions faced by a monopolisticelly competitive firm, and then answer the following questions. points eBook Print Referen a. Suppose the firm produces where there is productive efficiency. The resulting price and quantity combination Is illustrated in graph above by point " C b. When producing where there is productive efficiency, the firm would experience "a short-run loss. a normal profit an economic profit. c. Suppose the firm produces where there is allocative efficiency. The resulting price and quantity combination is illustrated in graph above by point e G d. When producing where there is allocative efficiency, the firm would a short-run loss. " a normal proft an economic profit.

Explanation / Answer

F, Productive efficiency occurs when P= min Average total cost

Normal profit, because P= min ATC

E, Allocative Efficiency occurs where P= MC

Earning a economic profit because P> average cost at that point.

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