What is a monopoly? Can a firm be a monopoly if close substitutes for its product exists?
What will be an ideal response?
A monopoly is the only seller of a good or service that does not have a close substitute. The firm can't be a monopoly if a close substitute for its product exists.
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Explain how the decision by parents to not immunize their children, hoping that their children will not get sick because other parents have had their children immunized, is an example of free riding
How is this behavior dangerous to the public and therefore not socially optimal?
Tariffs
A. may be imposed either to raise revenue or to shield domestic producers from foreign competition. B. are excise taxes on goods exported abroad. C. are per-unit subsidies designed to promote exports. D. are also called import quotas.
Households in the former Yugoslavia were required to declare the number of radios and television sets they owned, and to pay a monthly tax on each. From the perspective of the free-rider problem, the radio and TV taxes attempted to
A) generate negative externalities on Yugoslav households. B) generate positive externalities on Yugoslav households. C) coerce households into paying for the radio and television broadcasts. D) coerce households into listening less to radio and watching less television.
Considering perfect competition, monopolistic competition, and monopoly, which of the market structures can have positive profits in the short run?