Allocative inefficiency happens in a monopoly because at the profit-maximizing output level:
A. P > ATC
B. P > MR
C. P > MC
D. P > AVC
C. P > MC
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Plastic and steel are substitutes in the production of body panels for certain automobiles. If the price of plastic increases, with other things remaining the same, we would expect:
A) the price of steel to fall. B) the demand curve for steel to shift to the right. C) the demand curve for plastic to shift to the left. D) nothing to happen to steel because it is only a substitute for plastic. E) the demand curve for steel to shift to the left.
Price discrimination that substantially lessens competition is prohibited by the Clayton Act
a. True b. False Indicate whether the statement is true or false
Figure 10.6 shows prices, demands, and cost data for the only restaurant in a small town. What is its profit from senior customers under the senior discount policy of a $7 senior price and a $10 non-senior price?
A. $1,200 B. $1,500 C. $2,280 D. $2,560
When there is an unplanned draw down of inventories, firms will increase production.
Answer the following statement true (T) or false (F)