The monopolist should NEVER produce in the
A) elastic segment of its demand curve because it can increase total revenue and reduce total cost by lowering price.
B) inelastic segment of its demand curve because further lowering of the price reduces total revenue.
C) range of output for which the price elasticity of demand is infinity.
D) range of output for which there is a price elasticity exceeding one.
B
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In order to societies to reap the gains from trade, it is necessary to
A) define and enforce property rights. B) foster economic growth. C) distribute resources equally. D) achieve productive efficiency.
The figure above shows the market for milk. When the efficient quantity of milk is produced, the marginal social benefit from the last gallon is
A) $2.00. B) $2.50. C) $3.00. D) $3.50.
Dell Computers allows potential consumers to customize personal computers to their desires. Dell's strategy is successful because offering bundles that more exactly meet a consumer's preference allows Dell to extract more consumer surplus
Indicate whether the statement is true or false
Suppose a firm has multiproduct cost function that is additive such that C(q1,q2 ) = C(q1 ) + C(q2 ). What is the degree of economies of scope (SC) for this firm?
A) 2 B) 1 C) Zero D) Negative