In the market for "home heating" consumers typically have several options (e.g., electricity, heating fuel, natural gas, propane, etc.), yet we often think of firms in this industry as behaving like monopolists. Discuss the context in which your electricity provider is a monopolist. Is this characterization universally applicable? Explain your answer
In this case, the firms are monopolists in the short run when consumers are unable to change their "home heating" systems. In the long run, consumers can change from electric appliances to natural gas appliances and thus lessen the monopoly power of utility providers. As long as consumers are able to substitute, in the long run the monopoly pricing power is reduced.
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Answer the following statement true (T) or false (F)
If country A is importing good x from country B where x is produced in a perfectly competitive industry (composed of identical firms), then, in the long run, country A will suffer the entire deadweight loss from any tariff it might impose on imports of x from country B.
Answer the following statement true (T) or false (F)
Direct controls do not have a clear advantage where
A. an emission is so dangerous that it is prohibited altogether. B. the cost of implementing new methods of reducing emissions varies from firm to firm. C. effective and dependable metering devices have not been invented or are prohibitively costly to install and operate. D. a sudden change in circumstances calls for prompt and substantial change in conduct.
What are the economic effects of an appreciation of the dollar in foreign exchange markets?
What will be an ideal response?