Which of the following is NOT necessary in order for a monopolist to practice effective price discrimination?
A) The marginal cost of providing the same good to different groups of buyers must be different.
B) The monopolist must be able to segregate its market into different submarkets.
C) The buyers in various markets must face different price elasticities of demand.
D) The monopolist must have a downward sloping demand curve.
Answer: A
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"Value added" is defined as:
a. the price of the product multiplied by the quantity produced. b. total sales revenue divided by the quantity produced. c. total sales revenue minus sales taxes. d. the value of total product minus raw materials costs.
Use the following general linear supply function:Qs = 40 + 6P - 8PI + 10F where Qs is the quantity supplied of the good, P is the price of the good, PI is the price of an input, and F is the number of firms producing the good. Suppose PI = $40, F = 50, and the demand function is Qd = 700 - 6P , then if government sets a price of $30 what will be the result?
A. a shortage of 120 B. a surplus of 120 C. a surplus of 160 D. a shortage of 160
An increase in demand for a good will lead to a larger increase in price if the supply is relatively elastic.
Answer the following statement true (T) or false (F)
A market demand curve is found by
A. taking the demand curve of the "representative" consumer. B. adding the prices and the quantities demanded by a consumer. C. adding the quantities demanded for each individual consumer at each price. D. adding the prices each consumer would pay for each quantity.