Asked by Cameryn Stewart on Apr 30, 2024
Verified
Refer to Figure 15.1. From society's point of view, the ________ level is 25 haircuts.
A) minimum output
B) monopoly output
C) efficient output
D) shut down
Efficient Output
The level of production at which a company or economy can produce the maximum amount of goods and services with the least amount of input costs.
Cost Curves
Graphs in economics that show how the cost of producing a good or service varies with the quantity produced.
- Understand the efficiency implications of monopolistic competition compared to perfect competition.
Verified Answer
SM
Sentell MitchellMay 03, 2024
Final Answer :
C
Explanation :
The efficient output level is where the marginal cost (MC) curve intersects the demand curve, which represents the point where the additional cost of producing one more unit equals the price that consumers are willing to pay for that unit. This intersection maximizes social welfare by ensuring that resources are allocated where they are most valued by society. In this context, if the figure indicated that the intersection occurs at 25 haircuts, then 25 haircuts would be considered the efficient output level from society's point of view.
Learning Objectives
- Understand the efficiency implications of monopolistic competition compared to perfect competition.