Compared to a perfectly competitive industry, a monopoly produces a smaller output and charges a higher price
a. True
b. False
Indicate whether the statement is true or false
True
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Suppose a multi-product monopolist sells two complementary goods, A and B. Annual market demand for good A is QdA = 600 - 25PA - 12PB. Each time a consumer buys A, his demand for B is QdB = 4 - 0.4PB. The marginal cost of good A is a constant $4, and the marginal cost of good B is a constant $0.50. Suppose the price of good B is $5. What is the effective marginal cost of selling a unit of good A?
A. $5 B. $4 C. -$5 D. -$9
The analytical framework in which two or more firms compete for certain payoffs that depend on the strategy that the others employ is
A) game theory. B) the concentration ratio. C) a horizontal merger. D) network effect.
Which of the following occurs when there was a shortage of supply in a centrally planned economy?
a. Central planners reduced the amount supplied to each sector b. Shoppers waited in long lines at retail stores c. Store shelves were empty d. Shop operators expected "tips" or bribes for supplying scarce consumer goods e. All of the answers are correct
Which of the following is most likely to incorporate a great deal of economic rent?
a. sale of a bag of potato chips b. salary paid to an employee at the local Home Depot c. a soft drink sold by a vending machine d. sale of a rare stamp