The graph shows the situation facing Mike's Bikes Inc., a producer of mountain bikes. The demand and costs of other mountain bike producers are similar to those of Mike's Bikes. Is the market for mountain bikes efficient or inefficient in the long run? Explain your answer. Previous question Price and cost (dollars per bike) 400 MO 350- ATC The market for mountain bikes might be efficient in the long run if A. more firms entered the bike market B. the loss that arises because the quantity of mountain bikes produced is less than the efficient quantity is offset by the gain that arises from having a greater degree of product variety OC. firms exit the bike market OD. firms invested in technology that increased the total cost of production 300- 250- 200- 150- 100- 50- MR 0 0 50 100 Quantity (mountain bikes per week) 150 200 250 300 D
The graph shows the situation facing Mike's Bikes Inc., a producer of mountain bikes. The demand and costs of other mountain bike producers are similar to those of Mike's Bikes. Is the market for mountain bikes efficient or inefficient in the long run? Explain your answer. Previous question Price and cost (dollars per bike) 400 MO 350- ATC The market for mountain bikes might be efficient in the long run if A. more firms entered the bike market B. the loss that arises because the quantity of mountain bikes produced is less than the efficient quantity is offset by the gain that arises from having a greater degree of product variety OC. firms exit the bike market OD. firms invested in technology that increased the total cost of production 300- 250- 200- 150- 100- 50- MR 0 0 50 100 Quantity (mountain bikes per week) 150 200 250 300 D
Chapter1: Making Economics Decisions
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Transcribed Image Text:The graph shows the situation facing Mike's Bikes Inc., a producer of mountain bikes.
The demand and costs of other mountain bike producers are similar to those of Mike's Bikes.
Is the market for mountain bikes efficient or inefficient in the long run? Explain your answer.
Previous question
Price and cost (dollars per bike)
400
MO
350-
ATC
The market for mountain bikes might be efficient in the long run if
A. more firms entered the bike market
B. the loss that arises because the quantity of mountain bikes produced is less than the efficient quantity is offset by the gain
that arises from having a greater degree of product variety
OC. firms exit the bike market
OD. firms invested in technology that increased the total cost of production
300-
250-
200-
150-
100-
50-
MR
0
0
50
100
Quantity (mountain bikes per week)
150 200
250
300
D
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