How do the price and quantity of a monopoly compare to that of a perfectly competitive industry?
What will be an ideal response?
A monopolist sells a smaller quantity and charges a price greater than the perfectly competitive price.
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The figure above shows that monopoly is ________ because it produces a level of output at which ________
A) inefficient; marginal benefit equals marginal cost B) efficient; marginal benefit equals marginal cost C) efficient; marginal benefit exceeds marginal cost D) inefficient; marginal benefit exceeds marginal cost E) efficient; producer surplus is maximized
The government of Bassaland is looking for new revenue sources. It is considering imposing an excise tax on two goods: palm wine and diapers
If the price elasticity of demand for the goods are -0.47 and -1.89 respectively, which good should it tax if the goal is to raise revenue? If the government wants to tax only one good, which good should it tax if the goal is to discourage consumption? Explain your answer.
Why do firms practice price discrimination?
Jen is offered a job answering the phone in the State U economics department during lunchtime, from noon to 1 p.m., Tuesdays and Thursdays. Her reservation wage for this job is $15 per hour. If the department chair offers Jen $150 per week, how much economic surplus will she enjoy as a result of accepting the job?
A. $135 per week B. $15 per week C. $150 per week D. $120 per week