Suppose a monopolist's demand curve is P = 60 - Q, and its cost function is C = 10Q + 50 so its marginal cost is 10
If a governmental agency wished to set the price so that it created the smallest deadweight loss without causing the monopolist to have negative economic profits (thus shutting down), that price would be A) $10.00.
B) $11.02.
C) $14.57.
D) $35.00.
B
You might also like to view...
It is possible that when the money supply rises, interest rates may ________ if the ________ effect is more than offset by changes in income, the price level, and expected inflation
A) fall; liquidity B) fall; risk C) rise; liquidity D) rise; risk
Conventional wisdom holds that there are __________ in banking
A) economies of scope but not scale B) economies of scale but not scope C) economies of both scope and scale D) neither scope nor scale economies
You have a choice among three options. Option 1: receive $900 immediately. Option 2: receive $1,200 one year from now. Option 3: Receive $2,000 five years from now. The interest rate is 15 percent (0.15) per year. Rank these three options from highest present value to lowest present value
a. Option 1, Option 2, Option 3 b. Option 3, Option 2, Option 1 c. Option 2, Option 3, Option 1 d. Option 3, Option 1, Option 2 e. Option 1, Option 3, Option 2
The economic way of thinking stresses that
a. greed is the primary motivation for human action. b. as the benefits of an option increase, people will be more likely to choose that option. c. an objective value can be attached to physical goods. d. as the cost of an option decreases, people will be less likely to choose that option.