Big Waves is a large water park. Suppose the individual demand for entrance into Big Waves is Qd = 50 - (2 × P) and each consumer has the same demand. Big Waves has a constant marginal cost of $5 per consumer. If Big Waves practices two-part pricing and requires a membership fee and then a separate entrance fee, what is the profit-maximizing membership fee?
A) $400 B) $200 C) $50 D) $125
A) $400
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If a firm that repairs both motorcycles and cars is able to do so at a lower cost than a firm that does only one or the other, this would be an example of
A) economies of scope. B) economies of scale. C) monitoring. D) increasing transactions costs.
The price elasticity of supply when the supply curve is Q = 5 is
A) 5. B) perfectly inelastic. C) perfectly elastic. D) Cannot be calculated from the information provided.
The more consumer surplus is generated in a market dominated by a single monopoly, the more efficient the outcome.
Answer the following statement true (T) or false (F)
Refer to Figure 10-3. Best friends Laurel and Hardy, both enjoy watching romantic comedies and science fiction movies. Based on the diagrams above what can you conclude about their movie preferences?
A) They have identical movie preferences. B) The diagrams do not provide any information about relative preferences. C) Laurel enjoys science fiction movies more than Hardy. D) Laurel enjoys romantic comedies more than Hardy.