The long run outcome of the monopolistically competitive firm:
A. does not maximize profits.
B. is not efficient.
C. is the same as the short-run outcome.
D. maximizes total surplus.
Answer: B
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Assume a company can offer customers cable television and Internet service at essentially zero marginal and average cost
The following table shows each customer's marginal willingness to pay for television, Internet services, and for a bundle containing both. If television and Internet services are sold separately, the profit maximizing prices are Television Internet Bundle Alex $100 $60 $160 Rebecca $80 $100 $180 A) television $100 and Internet services $60. B) television $80 and Internet services $100. C) television $80 and Internet services $60. D) television $100 and Internet services $100.
The market for beef is in long-run equilibrium at a price of $3.25 per pound. The announcement that mad cow disease has been discovered in the United States reduces the demand for beef sharply, and the price falls to $2.00 per pound. If the long-run supply curve is horizontal, then when the long-run equilibrium is reestablished, the price will be:
Select one: A. $3.25 per pound. B. More information is needed to answer this question. C. $2.00 per pound. D. greater than $2.00 per pound but less than $3.25 per pound.
The classical model indicates that at the equilibrium interest rate, saving is
A. greater than investment. B. less than investment. C. unnecessary for investment. D. equal to investment.
If there is a sole producer of a good, and he faces no threat of competition, it is likely that:
A. government intervention will have no impact on the market. B. government intervention will increase total surplus. C. government intervention will make things better for buyers and sellers. D. government intervention will raise prices to consumers.