State the advantage and the disadvantage of output regulation.
What will be an ideal response?
The advantage of output regulation is that it is easy to enforce. The disadvantage is that the monopolist may seek to increase its profits by cutting cost corners, leading to a decline in quality.
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Market equilibrium: i. can never occur because there are always people who want a good but cannot afford it. ii. occurs at the intersection of the supply and demand curves. iii. is the point where the price equals the quantity.
A) ii only B) iii only C) ii and iii D) i only E) i and ii
An increase in the price of labor used to produce good Y will lead to
A) an increase in the market clearing price of good Y. B) an increase in the supply of good Y. C) a decrease in the demand for good Y. D) an increase in the demand for good Y.
Equality refers to how the pie is divided, and efficiency refers to the size of the economic pie
a. True b. False Indicate whether the statement is true or false
Demand and marginal revenue curves are downward sloping for monopolistically competitive firms because:
A. product differentiation allows each firm some degree of monopoly power. B. there is free entry and exit. C. there are a few large firms in the industry and each acts as a monopolist. D. mutual interdependence among all firms in the industry leads to collusion.