According to the graph shown, if the price were $5 a:
A. shortage would exist, signaling sellers to leave the market.
B. shortage would exist, signaling buyers to bid up the price.
C. surplus would exist, signaling sellers to drop their price.
D. surplus would exist, signaling buyers to bid up the price.
B. shortage would exist, signaling buyers to bid up the price.
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If the price of potatoes is reduced, consumers likely buy
A. significantly more potatoes. B. significantly fewer potatoes. C. roughly the same quantity of potatoes. D. an unknown quantity of potatoes; in this situation, consumers’ actions cannot be predicted.
One way to avoid the principal-agent problem would be to have:
A. the employee constantly monitor the employer's activities. B. the employer constantly monitor the employee's efforts. C. the employer share all management choices with employees before making decisions. D. the employee sign a waiver of release.
A monopolist can maximize profits by:
A. selling as much as he can produce. B. producing at the level of output at which MR = 0. C. following the same rules as a perfectly competitive firm. D. selling an output where P = ATC.
Which of the following statements is true?
a. A vertical merger is a merger of firms that compete in the same market. b. The rule of reason doctrine declares that the existence of monopoly alone is illegal. c. Government regulation is economically justifiable for a natural monopoly. d. Deficient information on unsafe products causes underconsumption.