The introduction of a tax in a perfectly competitive marketplace that is originally in equilibrium will only affect consumer’s surplus and not producer’s surplus.
Answer the following statement true (T) or false (F)
False
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Monopolistic competition is judged to be economically inefficient because
A) the price is greater than marginal cost. B) firms earn zero economic profit in the long run. C) marginal revenue equals marginal cost. D) firms have deficient capacity in the long run. E) firms earn an economic profit in the long run.
Fitness is a magazine for women about health and exercise. Fitness offers year subscriptions for $12 on their website. Jess, Ania, Mandy, and Chloe exercise together and each enjoy reading Fitness
Jess is willing to pay $10, Ania is willing to pay $16, Mandy is willing to pay $24, and Chloe is willing to pay $12 for a subscription to the magazine. Who will subscribe to the magazine? A) Ania, Mandy, and Chloe B) Jess, Ania, Mandy, and Chloe C) Jess, Ania, and Chloe D) Mandy and Chloe
Sweet Husks is a perfectly competitive corn farm. Currently, the expected price of an ear of corn is $0.20 and, at its current production level, Sweet Husks has a marginal cost of $.20 per ear. Which of the following is true regarding Sweet Husks?
A) To maximize expected profit, Sweet Husks should increase production. B) To maximize expected profit, Sweet Husks should decrease production. C) To maximize expected profit, Sweet Husks should double production. D) Sweet Husks is maximizing expected profit.
Which of the following is not a characteristic of market structure?
a. The number of sellers in the industry. b. The ease with which firms may enter or exit the industry. c. The existence of differences among sellers' products. d. The presence or absence of government taxation in the market.