If the government regulated a natural monopolist to achieve price efficiency without subsidies or price discrimination, the monopolist would
A. Lose money and go out of business.
B. Earn less profit than before, but still earn a profit.
C. Earn economic profits.
D. Earn only normal profits.
Answer: A
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Identify and briefly explain two economic incentives that would encourage firms to research and implement “design for recycling” programs.
What will be an ideal response?
The figure above shows a monopoly's total revenue and total cost curves. The monopoly's economic profit is maximized when it produces
A) 0 units of output. B) 5 units of output. C) 15 units of output. D) 20 units of output.
The aggregate supply curve
a. indicates the markup at which firms are willing to supply a given level of output b. is derived from equilibrium conditions in the money market c. has a positive slope because an increase in real GDP causes an increase in the cost of resources d. is found by summing up the supply curves of all the firms in an economy e. illustrates how a change in the price level affects total output
Losses are important to a competitive price-searcher market (industry) because they send a message to the market participants that
a. more resources should be devoted to a particular industry. b. resources can rise in value if diverted away from that particular industry. c. resources are allocated exactly as they should be. d. the firms should charge lower prices.