If a monopoly firm sells to competitive distributors and the distributors have a constant marginal cost of $8 and they are paying the profit-maximizing wholesale price of $20, what is the retail price of the product?
A) $12 B) $28 C) $8 D) $20
B) $28
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A likely example of complementary goods for most people would be
a. butter and margarine. b. lawnmowers and automobiles. c. chips and salsa. d. cola and lemonade.
Four automobile manufacturers account for 92 percent of total sales in their industry. They experience large economies of scale and favor tariffs on imported automobiles. What additional information is needed to classify this industry as a collusive oligopoly?
a. the market share for each firm in the oligopoly b. the existence of a cartel agreement between them c. evidence that they have zero long-run economic profits d. a high Herfindahl-Hirshman Index for their industry
Economic rent is generally associated with
A. high wages. B. low wages. C. both high and low wages. D. neither high nor low wages.
In monopolistic competition, if a firm advertises and raises its product, it tends to:
A. Raise costs and increase demand for its product B. Raise costs and decrease demand for its product C. Lower costs and increase demand for its product D. Lower costs and decrease demand for its product