Figure 10.1 shows a monopolist's demand curve. If the monopolist were to maximize its total revenue, it would produce ________ units of output and charge a price of ________.
A. 3; $5
B. 4; $4
C. 5; $3
D. 6; $2
Answer: B
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According to the Coase Theorem, so long as property rights are established and transactions costs are low, plaintiffs in court cases involving externalities will not care which way a judge decides.
Answer the following statement true (T) or false (F)
Refer to Figure 4-8. What is the value of producer surplus after the imposition of the ceiling?
A) $40,000 B) $100,000 C) $300,000 D) $430,000
According to the graph above, a price ceiling in this market would be non-binding if it were set at:
A. $5.
B. $8.
C. $10.
D. $13.
If a price is below equilibrium,
A. A surplus will cause the price to fall and the quantity supplied to decrease. B. A shortage will cause the price to rise and the quantity supplied to increase. C. A shortage will cause the price to fall and the quantity supplied to decrease. D. A surplus will cause the price to fall and the quantity supplied to increase.