Figure 8.8 shows demand, marginal revenue, and costs of a duopolist. Suppose that the two duopolists have the same costs. If the two firms form a cartel and charge the profit-maximizing monopoly price, then compared to perfect competition, each firm's profit will be ________ and the total output level will be ________.
A. greater; greater
B. greater; smaller
C. smaller; greater
D. smaller; smaller
Answer: B
You might also like to view...
A marginal tax rate is
A) the fraction of each additional dollar of income that must be paid in taxes. B) the incremental income one must earn to offset each additional dollar of tax. C) the ratio of a change in income to a change in taxes paid. D) the fraction of income that must be paid in taxes.
If the exchange rate for Micromania's micros to United States's dollars is 50 micros = $1, then micros have appreciated when the exchange rate becomes
a. 100 micros = $2 b. 100 micros = $1 c. 25 micros = $0.50 d. 25 micros = $0.25 e. 25 micros = $0.75
Which of the following statements is false?
A) For purposes of computing GDP, the purchases of new residential housing are considered investment although it is undertaken by the household sector. B) Consumption includes spending on durable goods but not spending on services. C) Investment includes fixed investment but not inventory investment. D) b and c
Policies focused on putting people to work by reducing the regulatory requirements associated with hiring them would be considered
A. supply-side policies. B. monetary policies. C. demand-side and supply-side policies. D. demand-side policies.