To practice price discrimination a firm must:
a. face an inelastic demand curve.
b. charge the same price to all its existing customers.
c. have different groups of customers with different price elasticity of demand.
d. sell a product which has close substitutes.
c
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Consider the Prisoners' Dilemma game, and suppose one player confesses but the other player does not confess. This outcome is
a. a Nash equilibrium. b. Pareto optimal. c. a Pareto improvement over the outcome where both players confess. d. Pareto-inferior to the outcome where neither player confesses.
To achieve the optimal provision of public goods,
a. the market should be allowed to find its equilibrium without government interference b. the government must limit the provision of these goods c. the government must levy taxes on producers of these goods d. the government must either provide the goods at prices different from those established on the market, or subsidize the production of those who provide thegoods e. a tax must be imposed on consumers equal to the negative externality
A monopoly that emerges from economies of scale is called a natural monopoly
Indicate whether the statement is true or false
Researchers demonstrate conclusively that drinking 4-6 ounces of ginger ale each day increases life expectancy by 3 years. What happens in the market for ginger ale?
A) The equilibrium price falls, and the equilibrium quantity rises. B) The equilibrium price rises, and the equilibrium quantity falls. C) The equilibrium price and quantity rise. D) The equilibrium price and quantity fall.