Question

1. In general, the marginal cost curve is U-shaped as you learned in lectures and the textbook. However, exception exists. Please provide one particular industry as an example to illustrate that MC is not U-shaped. Explain briefly the shape of MC in the industry. 2. Engineers at a national research laboratory built a prototype automobile that could be driven 180 miles on a single gallon of gasoline. They estimated that in mass production the car would cost $40,000 per unit to build. The engineers argued that Congress should force U.S. automakers to build this energy-efficient car. In your opinion, is energy efficiency the same thing as economic efficiency? Please explain your opinion and state whether you support it or not.

Answer 1