Assuming no change in product demand, a pure monopolist:
A. can increase price and increase sales simultaneously because it dominates the market.
B. adds an amount to total revenue that is equal to the price of incremental sales.
C. should produce in the range where marginal revenue is negative.
D. must lower price to increase sales.
Answer: D
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In the diagrams below, the subscript "1" refers to the initial position of the curve, while the subscript "2" refers to the final position after the curve shifts.
Which diagram above illustrates the effect on the natural-gas market, with the widespread use of "fracking" or hydraulic fracturing by gas-drilling companies?
A. (1) B. (2) C. (3) D. (4)
If X transferable emissions permits are issued and there are n potential polluters,
A) the government must initially assign each of the potential polluters X/n permits. B) the government must assign X/n permits to each potential polluter and check periodically that those permits have not moved. C) emissions will be the same whether or not the permits are split equally, so long as none of the permits are issued outside the group. D) emissions will be the same no matter who receives them first, so long as the recipient is willing and able to participate in the permit market. E) emissions will be less if the permits are given initially to firms with lower abatement costs.
The above table depicts prices, quantities, and marginal costs faced by the campus bookstore. Based on marginal analysis, what is the profit-maximizing level of output for the bookstore?
A) 1 book B) 2 books C) 3 books D) 4 books
An increase in the price of a substitute shifts the demand curve to the _______
a. right b. left c. it does not change the demand curve d. none of the above