If the price chosen by the City Commission is the price required for efficient allocation of resources, in the long run how many homes will ACME Hauling serve each month, assuming that it receives no other source of revenue?

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If the price chosen by the City Commission is the price required for efficient allocation of resources, in the long run how many homes will ACME Hauling serve each month, assuming that it receives no other source of revenue?

A) 9,000

B) 8,000

C) 5,500

D) 0

Answer : 0 ( D )

Explanation:

If the price required for efficient allocation of resources is the price chosen by the city commission which means that the marginal cost curve has to intersect the demand curve the price chosen then is $25

at $25 the company is producing at its maximum capacity of 8000 unit but at this rate of production the average cost of production is greater that the price chosen by the city commission ( $25 ) therefore  in the long run ACME hauling service will serve no home because they would incur losses and not profits.

(a) when insurance is obtained through a reciprocal insurer, the insureds are sharing the risk of loss with other subscribers of that reciprocal.

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