Suppose a monopoly faces an inverse demand curve of P = 100 ? 2Q and has constant marginal cost of 6Q. If the government is considering legislation that would regulate price to the competitive level, what is the maximum amount the monopoly would spend on (legal) lobbying activities designed to thwart the regulation?
A. $500
B. $62.50
C. $562.50
D. None of the answers is correct.
Answer: D
You might also like to view...
Define the official settlements balance. Is there any difference between the United States and other countries in terms of what this balance measures? How does this affect the ability of the countries to run current account deficits?
What will be an ideal response?
The national debt is
A. The accumulation of all annual deficit and surplus flows. B. A fairly risky asset that pays interest. C. The amount by which government spending exceeds tax revenues for a given year. D. The amount by which tax revenues exceed government spending for a given year.
If wages drop below the market equilibrium level in a competitive labor market:
A. firms will demand more labor than workers are willing to supply. B. firms will have to offer higher wages to attract the workers they need. C. there won't be enough workers willing to work at that wage. D. All of these statements are true.
If a firm pays for investment spending out of retained earnings:
A. the firm forgoes interest it could have received. B. current profits are adjusted downward. C. past profits are adjusted downward. D. the interest rate is irrelevant.