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"A firm in monopolistic competition maximizes its profit by producing where its price is equal to its marginal cost." Is this statement correct or incorrect? Explain.
We consider two regions A and B. Each market has the same size (i.e. number of consumers) but differs in the willingness to pay for one unit of the good proposed by the firm. On ma
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firm''s product sells for Rs.200 per unit in a highly competitive market. The firm produces output using capital (which it rents at Rs.7500 per hour) and labor (which is paid a wag
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Definition of Pareto Optimal Allocation
What two important functions are performed by the price system? (1) The price system is an automatic method for distributing goods and services. (2) The price system defines t
Regulation is not a panacea. There are troubles with rate regulation. In our litigious society, the legal proceedings contained in rate regulation are not inexpensive for any of
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