The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. If demand changes from P = 10 - .2Q to P = 7 - .3Q, the new equilibrium price is
A. 2.
B. 4.
C. 6.
D. 10.
Ans: D. 10.
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Three firms agree to operate as a monopoly and charge the monopoly price of $40 for their product and (jointly) produce the monopoly quantity of 25,000 units. If the competitive price for the product is $10, under the Clayton Act these three firms face treble damages of ________.
A) $3,000,000 B) $750,000 C) $2,250,000 D) $1,000,00
An oligopoly market consists of:
a. many firms which produce a standardized product. b. at least five firms one of which dominates the market. c. firms that make independent pricing and output decisions. d. a group of firms that dominate the market. e. firms which face perfectly elastic demand curves.
During this century, the growth rate of real GDP in the United States has averaged approximately
What will be an ideal response?
The industry elasticity of demand for gadgets is ?2, while the elasticity of demand for an individual gadget manufacturer's product is ?2. Based on the Rothschild approach to measuring market power, we conclude that:
A. there is significant monopoly power in this industry. B. the Herfindahl index for this industry is ?2. C. the Herfindahl index for this industry is 2. D. there is little monopoly power in this industry.