Refer to the diagram for a nondiscriminating monopolist. Marginal revenue will be zero at output:
A. q 1 .
B. q 2 .
C. q 3 .
D. q 4 .
B. q 2 .
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What are marketable permits? Suppose there are two firms in an area, each emitting tons of sulfur. The government decides on a target level of 200 tons of sulfur, and gives each firm a permit to emit 100 tons of sulfur
Suppose Firm A is very efficient and can reduce pollution by 100 tons with an abatement cost of $500. Firm B has an older plant, so it will cost Firm B $1,000 to reduce emissions by 100 tons. What will occur with marketable permits?
An insurance company requires homeowners it insures to have smoke detectors in their homes. The insurance company is trying to combat the
A. adverse selection problem. B. the free-rider effect. C. moral hazard problem. D. "lemons" problem. E. none of the above
Which of the following is NOT true about the theory of the dual labor market?
A. It is a class theory of employment. B. The dividing line between the primary and secondary markets is whether you have a college degree. C. Jobs in the secondary market pay better than those in the primary market. D. This theory does not take into account the huge middle level of occupations—nursing, social work, and non-college-graduate positions in insurance, banking, and retailing.
Firms that choose to use a fixed-price policy:
A. Will tend to experience larger inventory changes than firms that follow a flexible-price policy B. Will tend to experience smaller inventory changes than firms that follow a flexible-price policy C. Find that their inventories do not respond to demand shocks D. Will not hold inventories