Suppose the government breaks up a single-price monopoly and turns it into a perfectly competitive industry
What will happen to price and the quantity produced? What will happen to the monopoly's economic profit and the deadweight loss associated with the monopoly?
The price will fall and output will increase to the efficient level. The monopoly's economic profit will revert to the consumers as consumer surplus as the price falls and the quantity increases. The deadweight loss will be eliminated as output and the consumer surplus increase.
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Ann is waiting to be recalled after a layoff. Bill also has no job at the moment and is not searching for one. Who is officially "unemployed"?
A) Ann B) Bill C) Ann and Bill D) neither Ann nor Bill
Different measurements of elasticity include:
A. cross-price elasticity of demand, income elasticity of supply. B. preference elasticity of demand, cross-price elasticity of supply. C. price elasticity of demand, price elasticity of supply. D. income elasticity of demand, income elasticity of supply.
Economic theories are
a. useful because they are as exact as theories in the physical sciences b. useless because they are based on abstractions c. useful because they allow us to make predictions d. too complex to understand because they include all of reality e. useful in predicting events only if their assumptions are realistic
According to the graph shown, if a firm is producing at Q3:
This graph represents the cost and revenue curves of a firm in a perfectly competitive market.
A. profits are being maximized.
B. average total costs exceed the market price.
C. the firm should expand production.
D. marginal revenue is greater than marginal cost.