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Question: The following graph represents the situation of

The following graph represents the situation of Karl’s Kumquats, a kumquat grower.
The following graph represents the situation of Karl’s Kumquats, a kumquat grower.


a. How much profit is Karl earning?
b. Does the current situation of Karl’s firm illustrate productive efficiency or allocative efficiency? If so, briefly explain how.

a. How much profit is Karl earning? b. Does the current situation of Karl’s firm illustrate productive efficiency or allocative efficiency? If so, briefly explain how.





Transcribed Image Text:

Price MC and cost ATC Market price MR Quantity


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> Suppose you read the following item in a newspaper article, under the headline “Price Gouging Alleged in Pencil Market”: Consumer advocacy groups charged at a press conference yesterday that there is widespread price gouging in the sale of pencils. They

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