When the price of a good is below its equilibrium level under perfect competition,
a. consumers would benefit from an expansion of output.
b. some consumers are earning larger consumer's surpluses than they would in equilibrium.
c. the market is not operating at maximum efficiency.
d. All of the above are correct.
d
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Protectionism
Adverse selection in insurance requires that
a. all people face the same risk b. potential customers facing more risk are no more interested in purchasing insurance c. people are not risk averse d. insurers cannot tell higher risk people from lower risk people
Because an oligopoly is characterized by
A. few large sellers, each seller has some influence over the market price. B. a single seller of a product that has few suitable substitutes, the seller is a price maker. C. many small sellers, each firm must differentiate its product. D. a few sellers selling a differentiated product, each seller makes its price and output decisions independently.
Recall the Application about allegations that the makers of branded drugs made deals with generic drug makers once the patents expired on branded drugs to answer the following question(s).According to the Application, brand name drugs and generic drugs are ________ each other.
A. virtually identical to B. completely different from C. slightly similar to D. perfect complements of