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.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter13: Antitrust And Regulation

Section: Chapter Questions

Problem 10SQP

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