During the life of a drug patent, the monopoly pharmaceutical firm maximizes profit by producing the quantity at which marginal revenue equals marginal cost
a. True
b. False
Indicate whether the statement is true or false
True
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Winners of the Jackson City Lottery prize of $10 million are paid $1 million per year for ten years. Paid out in this form, this prize is
a. worth less than $10 million because the payment is deferred over time b. worth more than $10 million because the payments remain constant for the next ten years c. worth more than $10 million because the tax burden on the smaller payments is less d. worth exactly $10 million e. not worth $10 million only if the interest rate is positive
If G = T, then regardless of whether there is unemployment or inflation (or both), the budget is
a. balanced even though the economy may not be in equilibrium b. in deficit c. in surplus d. contractionary e. balanced and the economy is in equilibrium
A decrease in the market price of a product will reduce producer surplus because new producers will enter the market
a. True b. False Indicate whether the statement is true or false
If a consumer reallocates his or her spending away from Good B and towards Good A, then the consumer's total utility will increase if:
A. MUA/PA > 0 and MUB/PB > 0. B. MUA/PA > MUB/PB. C. MUA/PA < 0 and MUB/PB < 0. D. MUA/PA < MUB/PB.