Refer to Figure 15-15. Why won't regulators require that Erickson Power produce the economically efficient output level?
A) because at the economically efficient output level, the marginal cost of producing the last unit sold exceeds the consumers' marginal value for that last unit
B) because Erickson Power will earn zero profit
C) because there is insufficient demand at that output level
D) because Erickson Power will sustain persistent losses and will not continue in business in the long run
D
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A severe storm that slows postal delivery will cause
A) a decrease in Federal Reserve float. B) a decrease in Federal Reserve notes outstanding. C) an increase in Federal Reserve float. D) an increase in Federal Reserve notes outstanding.
Which of the following markets is closest to a monopoly?
A) a firm with a 90% market share B) the only gas station for 100 miles C) cable television D) garbage disposal
Which is a distortion (a loss of social surplus) associated with a monopolist's inability to observe consumer types when constructing a nonlinear pricing scheme?
a. The monopolist must expend more resources on market research. b. All bundles involve inefficiently low quantities. c. Some but not all bundles involve inefficiently low quantities. d. Quantities aren't distorted, but prices extract too much consumer surplus.
Which of the following is an example of a black market transaction? Annie rents an apartment ______.
Fill in the blank(s) with the appropriate word(s).