Market power is considered to be a market failure because firms with market power:
A.) Do not respond to consumer demand.
B.) Tend to ignore external costs.
C.) Produce less output than is socially optimal.
D.) Charge a lower price than is socially optimal.
C.) Produce less output than is socially optimal.
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Serafina was earning $75 per hour and working 50 hours per week. Serafina's wage rose to $90 per hour, and as a result, she now works 60 hours per week
What can you conclude from this information about the income effect and the substitution effect of a wage change for Serafina?
In economics, marginal means
a. incremental or decremental b. unimportant c. level or size d. a border-line situation e. a bad alternative
Farmer Jones is producing wheat, and must accept the market price of $6.00 per bushel. At this time, her average total costs and her marginal costs both equal $8.00 per bushel. Her average variable costs are $5 per bushel. In order to maximize profits or minimize losses, farmer Jones should:
A. Increase output B. Increase selling price C. Produce zero output and close down D. Continue producing, but reduce output
If a hurricane were to wipe out the majority of the eastern seaboard in the United States:
A. neither the short-run nor long-run aggregate supply curves would be affected. B. only the long-run aggregate supply curve would shift left. C. only the short-run aggregate supply curve would shift left. D. the long-run and short-run aggregate supply curves would both shift left.