If MC = Q/15 represents marginal cost for a monopolist and market demand is given by Qd = 500 - 10P, the monopolist maximizes profit by setting price equal to:
A. $50.00.
B. $20.00.
C. $12.50.
D. $31.25.
Answer: D
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Rapid economic growth tends to increase the degree of income mobility
Indicate whether the statement is true or false
The mangers of Healthy Snacks and Healthy Bars are engaged in a strategic interaction in which their interests are aligned, but there is more than one possible equilibrium. All of the following can help the managers determine the equilibrium outcome except which one?
A) an announcement by Healthy Snacks regarding their future plans, but not an announcement by Healthy Bars regarding their future plans B) the Pareto criterion C) an announcement made by either firm regarding their future plans D) a focal point
In setting premiums, insurance firms face which of the following problems?
a. It is difficult to assign individuals to the correct demographic group. b. Individuals do not want to pay a high premium if that matches their demographic group. c. Individuals do not always have the same characteristics as their demographic group. d. It is difficult to determine premiums for each demographic group.
Figure 8.2 shows demand and costs for a monopolistically competitive firm. At the profit-maximizing output level:
A. the firm is earning a positive economic profit and more firms are expected to enter the market. B. the firm is earning a zero economic profit and no firms are expected to enter the market. C. the firm is earning a negative economic profit and more firms are expected to leave the market. D. There is not sufficient information.