Suppose an unregulated monopoly faces a negatively-sloped and steep average cost curve. If a second firm enters, what will happen to the first firm's demand and average cost of production?
What will be an ideal response?
When a second firm enters, the demand curve facing the first firm shifts to the left as it shares the market demand with a second firm. Furthermore, a decrease in each individual firm's output causes the movement upward along the average cost curve.
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What will be an ideal response?
A 2.9 percent payroll tax (1.45 percent levied on both the employee and the employer) imposed on current workers is used to finance the
a. Medicaid program that provides healthcare for the poor. b. hospitalization costs of Medicare beneficiaries. c. cost of physician services supplied to the elderly. d. healthcare costs of both the elderly and the poor.
2 demand-side theories:
What will be an ideal response?
Rents for stores at shopping malls are usually tied to the profits of the store. Comment on how this arrangement affects the mall owner's income versus a fixed rent
What will be an ideal response?