Book publishers often use a cost-plus pricing strategy. One reason for this is
A) bookstores, not publishers, ultimately determine how many books will be produced.
B) much of the cost of publishing textbooks is difficult to assign to any particular book.
C) publishers do not want to incur the expense of determining the profit-maximizing strategy. They prefer cost-plus pricing because of its lower cost.
D) most publishers do not hire economists who can determine the number of books they must sell to equate marginal cost and marginal revenue.
B
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To stabilize the economy rational expectations theorists favor the use of
A. wage and price controls. B. discretionary fiscal policy. C. discretionary monetary policy. D. policy rules.
Suppose that a $0.75-tax is placed on gasoline. Under what circumstances will gasoline sellers end up shouldering the full burden of the tax?
A. If supply is perfectly inelastic, and demand is downward-sloping B. If demand is perfectly inelastic, and supply is upward-sloping C. If supply is upward-sloping and demand is perfectly elastic D. The consumer and the seller always share the burden of the tax
In the above figure, a price ceiling of $2 would
A) create a shortage. B) create a surplus. C) have no effect. D) cause the demand curve to shift leftward.
Which one of the following is not a possible barrier to entry high enough to keep competing firms out of a monopoly industry?
A) large economies of scale that result in a natural monopoly B) The monopoly firm has control of a key resource necessary to produce a good. C) a high concentration ratio D) There are important network externalities in supplying a good or service.