A firm in an oligopoly is similar to a monopoly in that both firms
A. could have significant market power and control over price.
B. do not face competition from others.
C. do not need to advertise.
D. face very inelastic demand for their products.
Answer: A
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Suppose that the demand curve D m for medical services can be characterized by the equation M = 2000 - P, where M is the amount of medical services received per year and P is the price. Suppose further that P 0 is constant at 800.
(a) Find the equilibrium quantity of services at P 0 . (b) Find the equilibrium quantity of services when there is only a co-payment of 20% required such that the price is 0.2P 0 . (c) How much additional expenditures induced by insurance are created?
Consider a particular market-clearing price and quantity under a perfectly competitive equilibrium. As the demand curve at this point becomes more inelastic, the consumer surplus in the market tends to:
A) increase. B) decrease. C) remain the same. D) We do not have enough information to answer this question.
Employers can shift payroll taxes by substituting capital for labor
a. True b. False Indicate whether the statement is true or false
Macroeconomics, as opposed to microeconomics, includes the study of what determines the level of
A) employment in a specific industry. B) employment in the economy. C) output of a specific firm. D) output of a specific industry.