Answer to Question #181970 in Macroeconomics for James

Question

QUESTION 23

In a perfectly competitive market, firms produce and sell goods:

1. Only to the wealthiest customers.
2. At the lowest possible average cost.
3. At the highest possible average cost.
4. At the lowest possible marginal cost.
5. At the highest possible marginal cost.

QUESTION 24

When perfectly competitive firms maximize their profits:

1. They harm society.
2. They maximize allocative efficiency.
3. They minimize allocative efficiency.
4. They minimize productive efficiency.
5. All of the above.

QUESTION 25

Perfect competition in the long run:

1. Is a hypothetical benchmark.
2. Should be avoided at all costs.
3. Causes irreparable harm to society.
4. Creates large profits for firms.
5. Makes everybody happy.

Answer 1

QUESTION 23

At the lowest possible average cost.

QUESTION 24

They maximize allocative efficiency.

QUESTION 25

Makes everybody happy.