Refer to Figure 15-12. If the firm maximizes its profits, the deadweight loss to society due to this monopoly is equal to the area
A) EFG. B) ACE. C) ABEG. D) ABF.
B
You might also like to view...
By specializing and trading, a country is able to
A) produce but not to consume combinations of goods that lie beyond its production possibilities frontier. B) consume but not to produce combinations of goods that lie beyond its production possibilities frontier. C) obtain the absolute advantage in the goods it produces. D) both produce and consume combinations of goods that lie beyond its production possibilities frontier. E) neither produce nor consume combinations of goods that lie beyond its production possibilities frontier.
Suppose that the United States decided to subsidize a major research and development effort by U.S. firms in the semiconductor industry. Under the current rules of the WTO and GATT, the U.S. effort is
A) allowed as long as the subsidies are a small percent of the total cost. B) allowed as long as the subsidies do not involve a direct payment to the industry. C) not allowed. D) neither allowed nor disallowed. E) allowed as long as the subsidies are for developing a "precompetitive" technology.
When the price of a perfectly competitive firm's output rises:
A. the firm's marginal cost curve will shift to the left. B. the firm will produce more. C. the firm will produce less. D. the firm's marginal cost curve will shift to the right.
Which of the following statements is valid when supply is perfectly elastic at a price of $4?
a. The elasticity of supply approaches infinity. b. The supply curve is vertical. c. At a price below $4, quantity supplied is infinite. d. At a price above $4, quantity supplied is zero.