[amp_mcq option1=”In Oligopoly” option2=”In Monopoly” option3=”In monopolistic competition” option4=”In perfect competition” correct=”option4″]<\/p>\n
The correct answer is: D. In perfect competition.<\/p>\n
Perfect competition is a market structure in which there are many buyers and sellers of a homogeneous product, and no one buyer or seller has a significant amount of market power. In a perfectly competitive market, firms are price-takers, meaning that they cannot influence the market price of their product. This is because there are so many firms in the market that each firm’s output is a small fraction of the total market output. As a result, each firm faces a perfectly elastic demand curve.<\/p>\n
In a perfectly competitive market, firms will produce at the point where marginal cost equals marginal revenue. This is the point of efficient production, where the firm is producing the output level at which the marginal benefit of production equals the marginal cost of production.<\/p>\n
In contrast, in other market structures, such as monopoly and oligopoly, firms have market power and can influence the market price of their product. As a result, these firms will not produce at the point of efficient production.<\/p>\n
A monopoly is a market structure in which there is only one seller of a good or service. In a monopoly, the firm has a significant amount of market power and can therefore charge a price above marginal cost. This results in an inefficient allocation of resources, as the firm produces less than the efficient output level.<\/p>\n
An oligopoly is a market structure in which there are a small number of sellers of a good or service. In an oligopoly, firms have some market power, but not as much as a monopoly. As a result, firms in an oligopoly can charge a price above marginal cost, but not as high as a monopoly. This also results in an inefficient allocation of resources.<\/p>\n
Monopolistic competition is a market structure in which there are many sellers of a good or service that is differentiated from the products of other sellers. In monopolistic competition, firms have some market power, but not as much as a monopoly or an oligopoly. As a result, firms in monopolistic competition can charge a price above marginal cost, but not as high as a monopoly or an oligopoly. This also results in an inefficient allocation of resources.<\/p>\n
In conclusion, the only market structure in which firms produce at the point of efficient production is perfect competition.<\/p>\n","protected":false},"excerpt":{"rendered":"
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