Refer to Figure 12-6. Suppose this firm is being regulated using a policy of marginal- cost pricing. In this case, the result is allocatively inefficient because the firm is earning profits. © allocative efficiency is achieved because price equals marginal cost. allocative efficiency is achieved because profits are maximized. the result is allocatively inefficient because the marginal cost curve lies below the ATC curve. the result is allocatively inefficient because the firm is suffering losses.

Refer to Figure 12-6. Suppose this firm is being regulated using a policy of marginal- cost pricing. In this case, the result is allocatively inefficient because the firm is earning profits. © allocative efficiency is achieved because price equals marginal cost. allocative efficiency is achieved because profits are maximized. the result is allocatively inefficient because the marginal cost curve lies below the ATC curve. the result is allocatively inefficient because the firm is suffering losses.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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100 90 80 70 60 50 40 АТС MC 30 20 10 MR D 2 4 6 8 10 12 14 16 18 20 QUANTITY (Thousands of subscriptions) PRICE (Dollars per subscription)
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