Marginal cost regulation of a natural monopoly:
a. generates economic losses for the seller
b. necessitates a subsidy payment to the firm.
c. imposes a price that is less than average total cost.
d. is characterized by all of the above.
d
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Michael values a stainless steel refrigerator for his new house at $3,500, but he succeeds in buying one for $3,000 . Michael's consumer surplus is
a. $500. b. $3,000. c. $3,500. d. $6,500.
A firm should shut down in the short run if it s revenue is smaller than its variable costs.
Answer the following statement true (T) or false (F)
Refer to the information provided in Table 21.9 below to answer the question(s) that follow. Table 21.9
Refer to Table 21.9. Assume that this economy produces only two goods Good X and Good Y. If year 1 is the base year, the value for this economy's real GDP in year 2 is
A. $168. B. $179. C. $202. D. $214.
An industry would be likely to lay off workers following:
A. An increase in the price of the firm's product B. An increase in the marginal revenue product of labor C. The imposition of a new minimum wage below the current equilibrium wage D. A successful attempt by an industrial union to push wages above the marginal revenue product of labor