Compared to an efficient perfectly competitive industry, the monopolist will
A. produce more output at a lower price.
B. produce less output and charge a higher price.
C. produce more output at a higher price and higher profit.
D. produce less output at a higher total cost.
Answer: B
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Suppose the demand curve for a good is given by the equation P = 200 - 1/2 Q and the supply curve is given by the equation P = 50 + 1/4 Q, where P represents the price of the good (measured in dollars per unit) and Q represents the quantity of the good (measured in units per week).
(i) Find the equilibrium price and quantity for this market. (ii) Suppose the government imposes a sales tax of $9 per unit on this good. Find the new formula for the demand curve, the new equilibrium quantity, the post-tax price received by suppliers, and the post-tax price paid by demanders. (iii) What fraction of the economic burden of this tax is borne by demanders and what fraction is borne by suppliers?
The citizens of a country often refuse to pay voluntarily for defense spending because ________
A) national defense is a common pool resource B) nobody can be excluded from being defended by the state C) all citizens do not derive equal satisfaction from national defense D) national defense is rival in consumption
The monopolistic competitive firm in short-run equilibrium may experience economic profits that are
A) always zero. B) greater than, equal to, or less than zero. C) always positive. D) always negative.
If the consumer's income and all prices simultaneously decrease by one-half, then the optimum consumption will
a. shift outward relative to the original optimum. b. move leftward along the original budget constraint. c. shift inward relative to the original optimum. d. not change.