Suppose two Cournot duopolist firms operate at zero marginal cost. The market demand is p = a - bQ. Firm 1's best-response function is
A) q1 = (a - bq2)/2b.
B) q1 = (a - 2bq2)/2b.
C) q1 = a/b.
D) q1 = a/2b.
A
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Prior to the 1930s, the majority of dollars spent by government was spent at the state and local levels
Indicate whether the statement is true or false
If the government owns a nationalized firm, the prices are
a. set by an administrative agency of the government b. set by the free market c. high enough to make economic profits for the government d. determined by competition e. set to encourage efficiency and reduce waste
The deadweight or social loss of monopoly:
a. is representative of production inefficiency. b. reflects a transfer from consumer surplus to monopoly profit. c. is representative of the low sales resulting from the high price charged by the monopolist. d. reflects that part of lost consumer surplus which is not transferred to monopoly profit.
Based on the table demonstrating three tax systems, under which system(s) would a high earner pay an amount of tax closest to that paid by a low earner?
a. progressive
b. proportional
c. regressive
d. both proportional and progressive